The Essar Power Limited (EPL) has entered into binding agreements for the acquisition of a 100% interest in Navabharat Power Private Limited. Essar Power Limited is a subsidiary of UK-based LSE listed Essar Energy Plc. EPL will initially acquire 76% of the existing equity with the balance 24% being acquired upon completion of certain project milestones. Essar Power has three more coal-based power plants coming up in Gujarat, Madhya Pradesh and Jharkhand.
The company officials informed that the deal will be undertaken in stages, with Essar announcing that it will take an initial 76% stake and the 26% remainder will be acquired on completion of “certain project milestones.”
Navabharat is a joint venture between Malaxmi Energy Ventures and Nava Bharat Ventures Ltd. Mahalaxmi Energy is reported to have sold its 50% stake in Navabharat Power to Essar Energy.Navabharat Power is a coal fuelled power plant that is being built in Dhenkanal district of the state of Orissa. This plant would have a capacity of 2250 MW. The project is being executed in two phases. The first phase would result in a capacity of 1050 MW and the second phase would increase the capacity to 1200 MW. The total estimated project cost is USD 2b. The project includes the allocation of the Rampia Coal block of 112 million tonnes and a 4.7 million tonnes per annum tapering coal linkage with Coal India Ltd. The first phase of the Project has already received a number of approvals including environment clearances for the power plant. The remaining approvals are being progressed and they include the issue of land acquisition.
Mr Naresh Nayyar, CEO of Essar Energy said, "Navabharat Power is a major part of our power phase II development projects. This acquisition is in line with the plans announced at the time of our IPO and will keep us on track to develop over 11,000 MW of power capacity by the end of 2014, thereby maintaining our leading position in the private sector power generation market in India."
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