Jindal Steel and Power Ltd (JSPL) has acquired the under-construction power plant of Monnet Power under the insolvency resolution process for ₹410 crore. Payments for the acquisition was made a day ago, sources told businessline.

The payment was funded from internal accruals of the steelmaker. Adani Power was one of the contenders for the plant.

Located near Malibrahmani in Angul (Odisha), the 1,050-MW power plant is expected to be operational over the next 12 months, sources said. The coal-fired power plant was offered on a slump sale basis in an auction on November 2, at a reserve price of ₹400 crore.

According to JSPL officials, the company will use the plant to supply power to its steel plants at Angul. Proximity of power plant to coal blocks — Utkal C, B1 and B2 coal mines — owned by the steelmaker, is seen as one of the major reasons for the bid. JSPL is expected to make these mines operational by the end of this fiscal.

The official said, the power plant, once operational, will be 20-25 per cent more efficient than existing plants in terms of coal usage. Benefits are expected to accrue to the company’s power consumption costs over the next few quarters too.

“The acquisition is primarily for captive usage and will improve our bottomline going forward,” the official said adding that the power plant is some 5-7 km away from the coal mine and the company’s steel plant there.

In February 2020, following bankruptcy proceeding, Monnet Power — a subsidiary of Monnet Ispat — invited bids for sale of its power plant in Odisha. The Angul plant had two units of 525 MW capacity each. Proceedings under the Insolvency and Bankruptcy Code were instituted against the company by IDFC Bank. Monnet Power owed around ₹6,000 crore to a consortium of lenders, including State Bank of India and Punjab National Bank. As there was no successful resolution, an application, based on the decision of committee of creditors, was filed for liquidation of the company in December 2018.

The application for liquidation was subsequently admitted to the NCLT, those aware said.