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New structure of UMPP investor friendly: Reports

By Religare
|

The Industry experts have said that the new structure of ultra-mega power projects (UMPPs) is investor friendly as it moves back to build, operate & own model while providing for fuel cost pass through and easy exit, media reported.

As per reports, the Government has done away with the design, build, finance, operate and transfer model that does not give the ownership of the project to the developer.

Commenting on the issue, PricewaterhouseCoopers Energy Leader Kameswara Rao told the media, "The revised bid documents are more investment friendly and could attract good response. The earlier model was very intrusive, with over 45 tests, a variety of adjustments and complex payment terms that would have dragged contracting parties into a host of disputes."

 

As per reports, the model provides for signing the contracts under build, operate and own mode. However, each UMPP will now have two attached special purpose vehicles (SPVs)—one holding the titles for land and coal block and the other holding approvals for operations. While the operational SPV will be transferred to the successful bidder, the infrastructure SPV will be leased out.

Story first published: Friday, August 21, 2015, 23:00 [IST]
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