According to a credible source, Adani Power Ltd has begun negotiations to buy the 600 MW Butibori thermal power facility in Nagpur, which was formerly controlled by Anil Ambani's now-insolvent Reliance Power Ltd. Furthermore, as per the article, the sale is estimated to be worth between Rs 2,400 crore and Rs 3,000 crore, or around Rs 4 crore to Rs 5 crore per MW. The acquisition of the project would allow India's top private thermal power generator to capitalize on the country's expanding electricity demand, according to the article.
According to the article, Adani Power is negotiating with CFM Asset Reconstruction Co. to buy the project from Vidarbha Industries Power Ltd. The project, which comprises two power plant units, was formerly valued at roughly Rs 6,000 crore; however, production (power generation) has ceased, hence the valuation must be reduced. The facility aligns with Adani's agenda." Vidarbha Industries Power, a part of Reliance Power, operates the Butibori project. Currently, CFM ARC is the project's sole creditor, having acquired its debts for Rs 1,265 crore. The spokesman continued: "The entire deal will be funded through the internal accruals of Adani group."
Adani Group Seeks Growth amid Vidarbha's Bankruptcy
JSW Energy Ltd, managed by Sajjan Jindal, indicated initial interest in the project but eventually withdrew owing to value and operational concerns, according to the article. Previously, Reliance Power sourced power from Butibori while serving as a distributor in Mumbai. Adani Electricity Mumbai Ltd subsequently acquired the Mumbai distribution business.
The power purchase agreement between Vidarbha and Adani terminated on December 16, 2019, causing financial issues for the Butibori plant. According to the source, lenders have started bankruptcy procedures against Vidarbha Industries, despite the fact that the business has not yet moved into insolvency.
The Adani Group intends to enhance its thermal power capacity. In a recent presentation, the organization stated that growing peak power demand emphasizes the importance of dependable thermal power capacity. Adani's strategic drive despite the coal scarcity. Current discussions are pricing the plant much lower than the average price for thermal plants in India, as both units are now non-operational owing to a coal scarcity, according to the source, as mentioned in the story.
The acquisition is consistent with Adani's intention to connect its coal-fired power plant in Tiroda, near Nagpur, to the Butibori project. According to the article, the goal of this integration is to resume power generation and deliver energy to Mumbai and surrounding areas, boosting Adani's competitive position against competitors Tata Power and MSEDCL.
The Tiroda project, which has 3.3 GW of coal-based supercritical capacity, is located around 125 kilometers from Nagpur on the Bhandara-Gondia state route, near the Butibori Power Plant. The Butibori project has a long-term Power Purchase Agreement (PPA) with Maharashtra state for 3085 MW, with the option to expand if the purchase is completed.
