India’s Maharashtra government is prepared to buy power from the mothballed Dabhol project at Rs. 2.30/kWh ($cents 4.8/kWh). The power strapped state electricity board is keen to purchase all of the 1,444 MW output from Phase II, despite having rejected the original power purchase agreement back in 2001, citing misrepresentation of equipment standards. Issues linked to debtors, both foreign and Indian, have to be settled before the project is completed, after which a further nine months or year would be required to complete the facility and begin generation. A group of Indian creditors to the plant is reportedly near to reaching an agreement to buy out the foreign creditors.
Indian lenders to the project are owned more than $1.4 billion, foreign creditors include Bank of America Corp, ABN Amro Holding and the JIBC.
Maharashtra has been buying in power from other states at Rs. 3.15/kWh ($cents 6.5/kWh) or more in order to meet its crippling shortfall.
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