Adani Power, Reliance Industries forge 20-year power purchase agreement

Adani-Reliance deal: Gautam Adani-led Adani Power Limited (APL) and Mukesh Ambani-led Reliance Industries Limited (RIL) have inked a 20-year power purchase agreement (PPA), marking a strategic collaboration between the two corporate giants. The agreement, aimed at securing long-term power supply, entails RIL's investment of Rs 50 crore for a 26 per cent ownership stake in one unit of Adani Power's subsidiary, Mahan Energen Limited (MEL).

Under the terms of the agreement, MEL, a wholly-owned subsidiary of Adani Power, will designate one unit of its Mahan thermal power plant with a capacity of 600 MW as the Captive Unit, according to a regulatory filing. This designation falls under the Captive User policy outlined in the Electricity Rules, 2005. RIL's investment in 5,00,00,000 equity shares of MEL ensures its proportionate ownership stake in the Captive Unit, as per regulatory requirements.

The collaboration underscores a significant milestone for both companies, as it secures a 500 MW power purchase commitment from Adani Power to Reliance Industries. The agreement signifies a strategic alignment to meet long-term energy requirements while leveraging each other's strengths in the energy landscape.

Additionally, Adani Power has disclosed another significant development in its financing arrangements. Following the enhancement of its credit rating to AA-, after the amalgamation of six Special Purpose Vehicles (SPVs) into the company, Adani Power has consolidated its standalone term loan facilities. Under a consortium financing arrangement involving eight lenders, Adani Power has secured a single long-term Rupee term loan facility amounting to Rs 19,700 crore, according to an exchange filing by the company.