The Coal Ministry has agreed to direct Coal India Ltd. (CIL) to sign the new fuel supply agreements (FSAs) with power producers having medium-term power purchase agreements (PPAs). This move would likely to benefit major private power players such as Reliance Power, Vedanta the group and the Abhijeet group.

During the meeting held at the Prime Minister’s Office last week, it was agreed that in the case of yet-to-be commissioned power plants, the FSAs would be signed but the coal supply would commence only after singing the long-term PPAs.

For medium-term PPAs, the Coal Ministry would have to follow the Power Ministry’s advice so that the FSAs were signed by November 15.

The Ministry of Power had recommended that FSAs be executed with inter alia power plant developers, which had tied up capacities through medium-term PPAs with distribution companies and the coal release might be co-terminus with the tenure of the PPAs.

Reliance Power’s 600 MW plant at Butibori in Nagpur will be one of the beneficiaries as it had signed a medium-term PPA with a Mumbai discom.

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