Nagpur: Adani Power Ltd has initiated discussions to purchase the 600 MW Butibori thermal power project in Nagpur, previously owned by the now-insolvent Reliance Power Ltd of Anil Ambani, in ₹3,000 crore deal, according to a Mint report.

The report said that the deal is expected to be valued between ₹ 2,400 crore and ₹ 3,000 crore, which equates to approximately Rs 4 crore to Rs 5 crore per MW. Acquiring the project would enable India’s leading private thermal power producer to leverage the growing demand for electricity in the country, the report said.

The report quoted an official as saying, “Adani Power is negotiating with CFM Asset Reconstruction Co to acquire the project under Vidarbha Industries Power Ltd. The value of the project, which consists of two power plant units, was earlier around Rs 6,000 crore, but currently, the production (power generation) has stopped; so, the valuation has to be lower. The plant fits into Adani’s strategy.”

The Butibori project is operated by Vidarbha Industries Power, a division of Reliance Power. Currently, CFM ARC is the sole creditor of the project, having purchased its loans for Rs 1,265 crore. The official said, “The entire deal will be funded through the internal accruals of Adani group.”

JSW Energy Ltd, led by Sajjan Jindal, initially expressed interest in the project but later withdrew due to concerns over valuation and operational issues, according to the report.

Previously, Reliance Power sourced power from Butibori while it operated as a distributor in Mumbai. Subsequently, Adani Electricity Mumbai Ltd took over the Mumbai distribution business. The power purchase agreement between Vidarbha and Adani expired on December 16, 2019, leading to financial difficulties for the Butibori project. Lenders have filed for bankruptcy proceedings against Vidarbha Industries, although the company has not yet entered insolvency, the report said.