Adani in talks to acquire 600 MW Butibori thermal project from Reliance 

Adani Power Ltd is in advanced discussions to acquire the 600 MW Butibori thermal power project in Nagpur, previously owned by the now-insolvent Reliance Power Ltd, according to a report by Mint. The deal is expected to be valued between Rs 24 billion and Rs 30 billion, which translates to approximately Rs 4 crore to Rs 5 crore per MW.

The Butibori project, operated by Vidarbha Industries Power Ltd, a subsidiary of Reliance Power, has been non-operational due to a shortage of coal and financial difficulties. CFM Asset Reconstruction Co, the sole creditor of the project after purchasing its loans for Rs 12.65 billion, is currently negotiating the sale with Adani Power. The entire acquisition is expected to be funded through Adani Group’s internal accruals.

This acquisition aligns with Adani Power’s strategy to expand its thermal power capacity amid growing electricity demand in India. The Butibori plant, once acquired, will be integrated with Adani’s nearby 3.3 GW Tiroda coal-fired power plant, enhancing Adani’s position in the market against competitors like Tata Power and MSEDCL.

The Butibori project had a long-term Power Purchase Agreement (PPA) with Maharashtra for 308.5 MW, and there is potential for expansion if the acquisition is finalized. The valuation of the plant is significantly lower than typical thermal plants in India due to its current non-operational status.

JSW Energy Ltd had initially shown interest in acquiring the Butibori project but later withdrew due to concerns over valuation and operational issues. The Adani Group’s strategic move to acquire the plant comes as peak power demand rises.