Reliance Power of the Anil Ambani-led Reliance Group has sold its entire stake in Jharkhand Integrated Power, an SPV created for the development of the 3,960 MW Tilaiya Ultra Mega Power Project (UMPP), to the State utility, Jharkhand Urja Vikas Nigam Ltd (JUVNL), for ₹112.64 crore.

JUVNL was the lead procurer from the Tilaiya UMPP. Apart from receiving ₹112 crore for the stake in the SPV, Reliance Power is likely to get bank guarantees of ₹600 crore released from power buyers, sources close to the development said.

Risk management

The transaction was designed back in 2015, when Reliance Power pulled out of the Power Purchase Agreement (PPA) of Tilaiya UMPP citing delays in land acquisition for the project.

This also paves the way for the resolution of the 4,000- MW project of Reliance Power- Krishnapatnam UMPP in Andhra Pradesh. This project, awarded in 2007, could not be taken forward as the coal from Indonesia became pricier, the company had said earlier.

According to company sources, the negotiations on the Krishnapatnam UMPP are going on as the process involves over 10 power buyers in five States.

Speaking at the company’s 23rd Annual General Meeting in September, 2017, Anil Ambani, Chairman, Reliance Power, said that risk management initiatives taken with respect to Tilaiya and Krishnapatnam are “well on track.”

“It effectively reduces future capex pipeline by ₹56,000 crore,” he said, adding that the company has been continuously bringing down its leverage which will reduce further if the company, among other efforts, puts its stranded gas-based power generation capacity on track.

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