Akhakol Combined Cycle Power Plant

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Torrent Power Generation Ltd (TPGL), a special purpose vehicle, was created to develop a 1100-MW combined cycle power plant on build-own-operate (BOO) basis at Akhakol, in Surat district of Gujarat. The majority of the power from the plant was to be sold to local private distribution companies owned by Torrent Group (Torrent Power SEC 50% and Torrent Power AEC 25%) under long-term power purchase agreements: 25% for Torrent Power Ahmedabad Electricity Company Limited (AEC) and 50% to Torrent Power Surat Electricity Company Limited (SEC). TPGL also signed a memorandum of understanding with PTC India Limited, a public-private company that provided power trading solutions in India, for off-taking the balance power (25%) for inter-state sale. The Torrent group took over AEC in 1998. It was an integrated power utility with a generating capacity of 500-MWs suppling 4 billion units of power to around 1.25 million customers. The Torrent Group took over SEC in 1996. It was a power utility distributing power to about 0.44 million customers in 52 sq km of its license area in the city of Surat. Both had been purchasing power from the Gujarat State Electricity Board to meet shortfalls in supply, which was costly compared to its own generation cost. The companies, therefore, helped establish TPGL in order to enhance their generation capacity to meet this demand. Torrent Group was the lead sponsor of the project and majority shareholder (60%) of TPGL. The balence of the 40% stake in TPGL was held by Asian Development Bank (10%) and other institutional investors and strategic partners. TPGL achieved financial closure in September 2004. The total project cost was estimated at Rs 30,960 million (US$683 million). The project was financed with a debt-equity ratio of 70:30 and an IDFC led consortium loaned Rs 216,700 lakhs (US$478 million). The lenders included IDFC (US$88.26 million), Power Finance Corporation (US$139.4 million), Industrial Development Bank of India Limited (US$66.2 million), UCO Bank (US$ 66.2 million), Canara Bank (US$66.2 million), Punjab National Bank (US$58.9 million), and ADB (US$54.36 million). The project was financed with a debt-equity ratio of 70:30. The power plant was expected to begin commercial operations in November 2006 and achieve full completion in November 2007. http://www.torrentpower.com/mega_pp/bareas_akha_plant_pro.php