BS reported that Essar Power Gujarat Limited, a subsidiary of Essar Group owned Essar Energy Plc, has reinstated a 25 year long term power purchase agreement with Gujarat Urja Vikas Nigam Limited to supply 800 MW of power to the state.

Essar Energy had terminated the agreement in August this year due to the non fulfillment by GUVNL of certain conditions under the PPA within the required time scale.

In a statement submitted to the stock exchanges, Essar Energy had informed that the two parties had originally signed the PPA on May 11th 2010 but Essar Energy subsequently announced on August 19th 2011 that it had terminated the agreement.

Essar Power Gujarat has now reinstated the PPA following satisfaction by GUVNL of all conditions subsequent relating to the agreement.

The PPA with GUVNL underlines Essar to supply power over a 25 year period at a levelised tariff of INR 2.8 per kWh net of transmission costs.

The supplies to come from Salaya II power project of the company with proposed installed capacity of 1,320 MW. The plant runs on imported coal and is likely to be commissioned in the first quarter of 2014.

Essar is setting up two more power projects in Gujarat, Salaya I and III with 1,200 MW and 600 MW capacity respectively. The company currently has 1,600 MW of capacity operational across the country, while additional 8,070 MW is under construction.

(Sourced from www.business-standard.com)