Indiabulls Power Secures Chhattisgarh Power Project
Indiabulls Power has reportedly emerged victorious in the bidding process for the 1,600-mw Bhaiyathan power project in Chhattisgarh. This pit-head power project, encompassing a substantial 350-million-tonne coal block, is a significant development for the state's energy landscape. Sources familiar with the situation suggest that the Chhattisgarh government is poised to formally announce the agreement shortly. Other prominent contenders for the project included industry giants Sterlite Industries and the GMR group.
Bidding and Project Details
The Chhattisgarh government invited bids for the sale of 65% of the power generated by the Bhaiyathan project. Indiabulls offered a competitive bid of Rs 0.81 per kilowatt hour (kWh), while Sterlite Industries and GMR Group proposed slightly higher bids of Rs 0.882 and Rs 0.885 per kWh, respectively. The project carries a substantial price tag of Rs 8,000 crore and is anticipated to reach completion within three years. The total cost of the project is Rs 8,000 crore and it will be completed within three years.
Merchant Sale Advantage
A noteworthy aspect of the Bhaiyathan project is its provision for merchant sale of 35% of the generated power. This stands in contrast to ultra-mega power projects, which mandate the sale of 100% of the power at a levelised tariff. It is projected that this merchant sale component will positively impact the overall revenue realization from the plant's power output.
Competitive Landscape and Funding
The bidding process saw intense competition, attracting a total of 10 participants, including major players like Reliance Power and Tata Power. All bids were submitted based on a levelised tariff, factoring in potential price escalations over time. Given the escalating global coal prices, which have reached $100 per tonne, pit-head power plants currently present a particularly compelling opportunity for power producers. Indiabulls had recently bolstered its financial position for its power ventures by securing Rs 1,600 crore through equity placement with steel magnate LN Mittal and Farallon Capital.
Indiabulls Power's Expanding Portfolio
In addition to the Bhaiyathan project, Indiabulls Power Services is actively developing two large-scale thermal power plants in Maharashtra, with a combined capacity of 3,960 mw. Further demonstrating its commitment to diversifying its energy sources, Indiabulls Power has also finalized an agreement with the Arunachal Pradesh government for the development of four mid-sized hydro power projects. Feasibility studies for these hydro projects are currently underway.