Tata Power executes supplementary PPA for Mundra plant

Tata Power has formally executed a Supplementary Power Purchase Agreement (SPPA) with Gujarat Urja Vikas Nigam Limited (GUVNL) for its 4 GW Mundra thermal power plant, filing a disclosure with BSE and NSE this morning under Regulation 30 of the SEBI (LODR) Regulations, 2015.

The filing confirms that identical agreements are now set to be executed with Maharashtra, Rajasthan, Punjab, and Haryana, which would bring the full capacity of the plant back onto the grid.

The Mundra plant, one of India’s largest imported coal-based power facilities, had been under temporary suspension and was accumulating significant cash losses, primarily due to unrecovered fuel costs. The revised SPPA structures fuel costs as a pass-through arrangement, removing the core financial obstacle that had made operations unviable.

As reported earlier by Power Peak Digest, the Gujarat cabinet had approved the agreement following roughly nine months of plant shutdown. Tata Power had confirmed to stock exchanges on March 20 that a government order had been issued, with the formal signing to follow once remaining regulatory clearances were in place.

Power generation is expected to resume shortly, ahead of peak summer demand. The restart is projected to eliminate cash losses running at several hundred crore rupees annually and contribute positively to Tata Power’s EBITDA.

Today’s filing moves the development from state-level approval to a multi-state execution track, with four additional procurer states now formally in line to sign. 

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