New Delhi: Days before the Lok Sabha election dates were announced, the government paved the way for Adani Power Limited (APL) to set up India's first power sector special economic zone (SEZ) by amending guidelines.
With the amendment to power-related guidelines for SEZ by the Ministry of Commerce earlier this year, APL is set to build a power-specific SEZ over 425 hectares in Jharkhand's Godda district, the existing site for its coal-fired thermal power plant.
Adani Power got the go-ahead from the SEZs board of approval on February 25, a month after the Commerce Ministry prompted the amendment in January. With the SEZ status, it would now enjoy duty waiver, tax exemptions and faster clearances.
As per the memorandum of understanding signed between APL and Bangladesh in August 2015, two months after Prime Minister Narendra Modi visited Dhaka, the plant will supply most generated power, about 1,600 megawatt (MW), to the neighbouring country.
For the power-deficient India, electricity export had been restricted to public sector companies like the National Thermal Power Corporation (NTPC) and the Power Trading Corporation (PTC).
Thus, APL's proposal was rejected the first time when it was submitted in February 2018.
The Commerce Ministry's standing guideline of February 16, 2016 stated: "No single standalone power plant will be permitted to be set up in an SEZ in which there would be no other units."
But in December 2018, the Ministry proposed to amend the February 2016 guideline, highlighting a Power Ministry provision that allowed Indian generating stations supplying electricity exclusively to neighbouring countries to build independent transmission system.
The Commerce Ministry argued exclusive export of electricity from SEZs could not be envisaged at the time it had drafted the February 2016 guideline and, hence, it needs to be amended. The SEZs board of approval cleared the amendment on January 9, 2019.
As for Jharkhand's energy policy that requires all power projects to supply 25 per cent of the electricity generated in the state, state officials believed with the SEZ status it has gone beyond the state's purview and the state was less likely to oppose it.