Adani Green, Adani Power shares rise 5% on signing 6,600 MW power deal with Maharashtra state DISCOM

Shares of two Adani Group companies – Adani Green Energy and Adani Power – rose up to 5% in opening trade on Monday after they inked a 6,600 megawatt (MW) power supply agreement with Maharashtra State Electricity Distribution Company Limited (MSEDCL). As per the agreement, Adani Green Energy will supply 5 gigawatt (GW) (or 5,000 MW) of solar power to Maharashtra, while Adani Power will provide 1,496 MW (net) thermal power to the state.  

Reacting to the news, Adani Power shares gained as much as 5.1% to ₹665.90 in the early trade today, while its market capitalisation climbed to ₹2.53 lakh crore. Similarly, Adani Green shares jumped 4.5% to 1870, with its market cap increasing to 2.93 lakh crore. Meanwhile, the equity benchmarks Sensex and Nifty were up around 0.2%.

In an exchange filing on September 15, Adani Power informed exchanges that Adani Green Energy Limited (AGEL) signed a long-term power purchase agreement (PPA) with the MSEDCL, based on the letter of intent (LOI), for the supply of 5 GW (5000 MW) of solar power. This will come from the world’s largest renewable energy park, currently being developed at Khavda in Gujarat’s Kutch District, to the state of Maharashtra, as outlined in the LOI awarded to Adani Power Limited, in line with tender conditions, as per the filing.

As per the release, the solar capacity has been allocated at a flat tariff of ₹2.70 per kWh for supply of power for a period of 25 years. The solar projects are expected to be connected to Inter State Transmission System and shall be developed in a staggered manner over a period of three years from execution of the PPAs with MSEDCL.  

Meanwhile, Adani Power Limited (APL) will sign a long-term power supply agreement with MSEDCL for supply of 1,496 MW (net) thermal power to Maharashtra state from a new 1,600 MW Ultra-supercritical thermal power project.

The thermal capacity has been awarded to APL on design, build, finance, own and operate (DBFOO) basis with sourcing of fuel from coal linkages allocated under the SHAKTI Policy. Under the terms of the award, APL will enter into a 25-year power supply agreement with MSEDCL for supply of 1,496 MW of electricity (net of auxiliary consumption) on long term basis from a new thermal power plant having installed capacity of 1,600 MW (2x800 MW) to be set up utilising ultrasupercritical technology. “Power supply under the proposed PSA will commence three and a half years after the Appointed Date as defined thereunder in case of Unit 1 (800 MW) and four years in case of Unit 2 (800 MW).”

The filing highlighted that the 6,600 MW capacity has been secured through a competitive bidding process initiated by MSEDCL for procurement of combined 1,600 MW thermal and 5,000 MW solar power. The terms of the tender permit APL to bid for thermal power capacity along with solar power capacity, which can be supplied by a group company. “APL accordingly also bid for 5000 MW solar capacity on behalf of AGEL, thereby leveraging the two entities’ respective competitive advantages and strengths in the thermal and solar power sectors,” the filing noted.

AGEL’s wind-solar hybrid cluster in Jaisalmer started providing green energy to Mumbai city in March 2023, with the share of renewable energy in the Mumbai distribution circle’s energy mix standing at 37% as of June 2024. “The solar capacity award of 5 GW is the world’s largest such award since 2020, bolstering AGEL’s leadership in India and as one of the largest RE portfolio globally. Similarly, the thermal capacity award is the largest in India in recent years to be awarded to the private sector,” the release said.

Adani Power operates an installed thermal power capacity of 17,010 MW spread across ten power plants in Gujarat, Maharashtra, Karnataka, Rajasthan, Chhattisgarh, Madhya Pradesh, Jharkhand, and Tamil Nadu, apart from a 40 MW solar power plant in Gujarat. On the other hand, AGEL currently has an operating renewable portfolio of 11.2 GW, the largest in India, spread across 12 states. The company has set a target of achieving 50 GW by 2030 aligned to India’s decarbonisation goals.

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