The 14 year old contentious PPA issue of Gujarat Urja Vikas Nigam Limited(GUVNL), the Gujarat government’s power supplier and Adani Power has finally been resolved with Adani Power agreeing to relinquish its rights to Rs 11,000 crores which the GUVNL was supposed to pay them. The matter had reached the Supreme Court.
Sources have confirmed to Vibes of India that Adani Power and GUVNL have reached an out of court settlement pertaining to a dispute of the termination of the power purchase agreement (PPA) between the two parties.
Adani has also agreed to relinquish its right for any compensation, which as per industry estimates is around Rs 11,000 crore, that was to be payable by GUVNL.
Both Adani Power and GUVNL have also submitted the settlement deed to the Supreme Court. The deed reads:
“In terms of the settlement deed reached between the parties, the respondent No. 1 (Adani Power) has agreed that the termination of the bid 2 PPA dated 02.02.2007 which was the subject matter of the decision dated 02.07.2019 of the Hon’ble Court shall not be given effect to and the respondent No. 1 duly waives any right to enforce such termination “.
“The respondent No.1 that is Adani Power, Mundra has further agreed that it shall not claim any compensation in terms of the decision dated 02.07.2019 passed by the Hon’ble Court and shall relinquish its right to claim any such compensation in perpetuity,” the application further read.
Both parties have also agreed on the withdrawal of the proceedings pending before the Central Electricity Regulatory Commission. On its part, GUVNL has agreed on the methodology reworked for the payment of energy charges to Adani Power for generation and supply of electricity under the Power Purchase Agreements.
In September 2021, the Supreme Court had asked Adani Power to respond to a curative petition filed by GUVNL against the order passed by the apex court a year earlier that termed the unilateral termination of the PPA by Adani Power as valid and legal.
The court had also ordered the CERC to determine compensatory tariff for the power supplied by Adani Power to the state PSU.
Adani Power (Mundra) had signed a PPA with GUVNL in 2007 to supply 1,000 MW form its project in Korba, Chhattisgarh. But citing no coal supply by the Gujarat Mineral Development Corporation, Adani Power terminated the pact claiming that the supply of electricity was conditional to coal supply. Adani then told the GUVNL that it would instead supply power from its Mundra power plant based in Kutch.