Essar Energy plc's (ESSR.L) subsidiary, Essar Power Gujarat Limited, reinstated a long term power purchase agreement or PPA with Gujarat Urja Vikas Nigam Limited or GUVNL, the Gujarat state electricity utility, following satisfaction by GUVNL of all conditions subsequent pertaining to the deal. The two parties originally entered into the power purchase agreement on May 11, 2010, but Essar Energy subsequently announced on August 19, 2011 that it had terminated the deal due to the non-fulfilment by GUVNL of certain conditions under the PPA within the required timescale.
The PPA with GUVNL is to supply 800MW of power over a 25 year period at a levelised tariff of Rs. 2.80 per kWh or around 5.7 US cents per kWh net of transmission costs. The Salaya II power project, located in the Jamnagar district of Gujarat, consists of two generation units of 660MW each, the company added. It is scheduled to be commissioned by the first quarter of 2014.
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