Under the terms of the MoU, Reliance Power will purchase three operating hydro power plants with an aggregate capacity of nearly 1,800MW and asset size of over INR100bn ($1.66bn), from Jaiprakash Power Ventures.
The MoU follows withdrawal of TAQA India Power Ventures from an agreement with Jaiprakash Power Ventures for the sale of Baspa II and Karcham Wangtoo hydro-electric projects in Himachal Pradesh, India.
Jaypee Group Executive Chairman Manoj Gaur said: "It is unfortunate that the Abu Dhabi based company TAQA has decided to undo its agreement with Jaiprakash Power Ventures Ltd to buy 1000 MW Karcham Wangtoo and 300 MW Baspa II projects due to a change in their business strategy and priorities.
"This will, however, not impact our Group’s commitment to reduce debt to Rs 45,000 by March 2015."
With estimated asset life of over 50 years include, the three power plants, including 300MW Baspa Stage II project and 1091MW Karcham Wangtoo project in Himachal Pradesh as well as 400MW Vishnuprayag project in Uttarakhand, are based on run-of-the-river technology to eliminate the need for a large reservoir.
The transaction, which is subject to approvals, proceeds will be used by Jaypee Group to reduce its consolidated debt.
