Maheshwar Hydro Power Project

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The Maheshwar Hydro Power Project was a 400 MW run-off-the-river project located at the Narmada river, in Mandaleshwar (Madhya Pradesh). The project was developed by the S. Kumars group through a subsidiary, Shree Maheshwar Hydel Power Corporation Limited (SMHPCL). The project was awarded to the S. Kumars group in 1992 by the Government of Madhya Pradesh (GoMP) through a process of competitive bidding for execution on Build, Own and Operate (BOO) basis. The project was initially started under Narmada Valley Development Authority (NVDA) of GoMP in 1978 and was later awarded to Madhya Pradesh Electricity Board (MPEB/ MPSEB) by GoMP in 1988. The work on project was initiated in 1997 but was stalled in 2001 due to various extraneous reasons impacting the financial tie ups of the project consequent on the sudden and unforeseen withdrawal of the American collaborating company, M/s Ogden Energy Asia Pacific Ltd, from their commitment to contribute 49% of the total project equity. This was as a result of the decision of M/s Ogden to close down their operations not only in India but in Asia in general. Subsequently, Infrastructure Leasing & Finance Services Limited (IL&FS) was employed as financial advisors for the project to recommend Financial Realignment Plan (FRP). In the year 2005, an Amended & Restated Agreement was signed by GoMP with SMHPCL, Power Finance Corporation (PFC), MPSEB and the S.Kumars Group. During FY 2004-05, the Ministry of Power, Govt. of India formed a task force including of Directors of PFC for speedy development of project. Subsequently, as mandated by the lenders and in agreement with the promoters, an independent management was inducted with nominees of PFC, other lenders and GoMP. SMHPCL had signed a Power Purchase Agreement (PPA) with MPSEB in 1994 for 35 years (extendable by 20 years) for sale of power generated from this project. The PPA was amended in 1996. The project cost was estimated to cost USD 612.3 million and achieved financial closure in September 2006. PFC is the lead financier for the project.