Welcoming the order of granting nearly Rs 830 crore in compensation by CERC, Adani Power today said the move by the sectoral regulator will help sustain operations at Mundra project in Gujarat and revive investor confidence.
The amount is to make up for the losses incurred by the project due to higher cost of imported Indonesian coal.
"Despite facing huge financial losses, Mundra power plant has been supplying power to the states of Gujarat and Haryana.
This order will facilitate in sustaining operations at Mundra and enable us to continue honouring PPA commitments," Adani Power said in a statement.
The order shall mitigate hardships to some extent on account of impact of enactment of Indonesian regulation and shortage of domestic coal supplies from Coal India Ltd (CIL), it added.
"When the power sector is facing a multitude of issues, this order shall go a long way in reviving investor confidence and will provide sustainable energy security for the country," the statement said.
In a 133-page order, the Central Electricity Regulatory Commission has said that Gujarat has to pay Rs 420.24 crore, while Haryana has to shell out Rs 409.51 crore as compensation from the comissiong date till March 31, 2013.
For the Mundra plant, Adani Power has inked two power purchase agreements (PPAs) with Gujarat -- each for 1,000 MW -- and PPAs with two Haryana utilities for total capacity of 1,424 MW.
Rest of the electricity generated from Mundra plant is sold on merchant basis. The project is located in Gujarat.
This order pertains to one PPA with Gujarat for 1,000 MW and two PPAs with Haryana utilities -- Uttar Haryana Bijli Vidyut Nigam Ltd and Dakshin Haryana Bijli Vidyut Nigam Ltd.
Besides, the regulator has allowed compensatory tariff for the period from April 1, 2013 on the basis of a formula.