Vedanta Secures 500 MW Power Supply Pact with Tamil Nadu for Five Years

Vedanta Limited announced a significant five-year Power Purchase Agreement (PPA) with Tamil Nadu Power Distribution Corporation Ltd (TNPDCL) for the supply of 500 MW of electricity. This agreement will see Vedanta's thermal business units, Meenakshi Energy Limited (MEL) supplying 300 MW and Vedanta Limited Chhattisgarh Thermal Power Plant (VLCTPP) supplying 200 MW, commence operations from February 1, 2026, and run until January 31, 2031. The contracted tariff is set at Rs 5.38 per kilowatt-hour (kWh). This deal represents the highest allocation secured by Vedanta from TNPDCL's tender of 1,580 MW.

Rajinder Singh Ahuja, CEO - Power, Vedanta Ltd, stated that these PPAs enhance revenue visibility and financial strength, supporting future growth and the planned demerger of its power portfolio under the Vedanta Power identity. The company acquired Meenakshi Energy (1,000 MW capacity) in Andhra Pradesh in 2023 and is commissioning its Vedanta Limited Chhattisgarh Thermal Power Plant (1,200 MW) with its first unit expected in August 2025. Vedanta globally operates nearly 12 GW of thermal power capacity.

Impact: This agreement is a positive development for Vedanta, providing predictable revenue streams and strengthening its power business. It is expected to have a moderate financial impact, contributing to the company's overall profitability and supporting its strategic initiatives like the power business demerger. Rating: 7/10.

Difficult Terms: * PPA (Power Purchase Agreement): A contract where a power generator agrees to sell electricity to a buyer (like a utility company) for a set period at an agreed price. * Tariff: The price set for electricity, in this case, Rs 5.38 for every kilowatt-hour used. * MW (Megawatt): A unit measuring the rate at which electricity is generated or consumed. * kWh (Kilowatt-hour): A unit measuring the amount of electrical energy consumed over time (1,000 watts used for one hour). * Demerger: The process of splitting a larger company into smaller, independent companies. * Merchant Power: Electricity sold on the open market rather than through long-term contracts. * IPP (Independent Power Producer): A company that owns and operates power plants but is not a public utility.