Clarion Power Plant

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In December 1997, Non-Conventional Energy Development Corporation of Andhra Pradesh Limited (NEDCAP) approved the development of a 12 MW biomass power plant in Prakasam district of Andhra Pradesh State by Clarion Power Corporation Limited (CPCL). In January 1998, CPCL formally entered into a memorandum of understanding with NEDCAP for the development of this project. All the power from this project was supplied to APTRANSCO, the electricity transmission company for the state of Andhra Pradesh, under a long term power purchase agreement (PPA) signed in September 2003. The PPA was for an initial period of 20 years (from commercial operations date) with a possibility of renewal for an additional term upon mutual agreement by the parties. The fuel used for the plant was generally agricultural waste, including rice husk, ground nut shell and agro waste. The fuel required for the power plant was procured from farms in nearby villages under short-term contracts. CPCL, a special purpose company, was majority owned by India’s Lanco Group (86%). Information on the other promoters of CPCL was not available from public sources. The total cost of this power plant was estimated at US$ 10.1 million (Rupees 470 million). The project reached financial closure in 2003. In April 2006, CPCL signed an emission reduction purchase agreement for trading of the issued Certified Emission Reductions (CER), pursuant to the clean development mechanism (CDM), with Electricity De France Trading Limited (EDF). The project began commercial operations in January 2004.