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ONGC may buy IL&FS’ 26% stake in Tripura power arm

IL&FS invites expressions of interest for share acquisition

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State-owned energy major ONGC, along with partners, is likely to buy IL&FS’s 26% stake in ONGC Tripura Power Company Ltd. (OTPL), which owns and operates a 726.6 MW gas-based power plant in Tripura supplying power to the northeast region.

IL&FS has invited expressions of interest (EoI) for acquisition of 26% of the issued and outstanding shares of OTPC.

“ONGC will have the right of first refusal for IL&FS’s 26% stake and the company will exercise its right,” a person in the know of the development told The Hindu.

OTPC operates one of India’s largest gas-based power project, and has load-centre advantage, with access to the energy deficit northeastern region of India as well as Bangladesh.

OTPC has executed the State support agreement with the Tripura government to set up the power project and receives support from the Power Ministry for offtake tie-ups via State utilities. TPC’s 86.5% capacity is under long-term power purchase agreements, and gas is sourced from ONGC at fixed prices as well as fixed escalation through a long-term fuel supply agreement.

The plant also has potential for expansion through the addition of two 363.3 MW units for which majority approvals are already in place, so as to reach the total of 1,453 MW capacity.

OTPC holds 26% stake in North East Transmission Company Ltd., which has developed a 1,325.6 ckt. km, 400 KV interstate transmission line in Assam, Meghalaya and Tripura, from the project site to the substation of Power Grid Corporation.

ONGC holds 50% in OTPC while 23.5% is held by India Infrastructure Fund-II (managed by Global Infrastructure Partners) and Government of Tripura holds 0.5%.

“Any additional stake by ONGC will make OTPC a government-owned company,” said another source in the know of the development, adding that IL&FS’s existing 26% stake may be divided among existing promoters on a proportionate basis.

ONGC chairman Sashi Shankar did not respond to calls from The Hindu.