Bid process coordinator REC Power Development & Consultancy Ltd (RECPDCL) has incorporated a wholly-owned subsidiary “Banaskantha Transco Ltd” that will act as a special purpose vehicle to develop an interstate transmission system (ISTS) scheme in Gujarat.
The ISTS scheme, where bidder selection will take place under the tariff-based competitive bidding (TBCB) mechanism, is termed as “Augmentation of transformation capacity at Banaskantha (Raghanesda) PS (GIS).”
The SPV was incorporated on October 25, 2024, REC, the holding company of RECPDCL, said in a stock exchange filing.
On the same date, RECPDCL also incorporated “Rajasthan V Power Transmission Ltd,” to develop an ISTS-TBCB scheme known as “Transmission system for evacuation of power from Rajasthan REZ Phase-V (Part 1: 4 GW) [Sirohi/Nagaur] Complex.”
On October 23, 2024, it may be recalled, RECPDCL had incorporated “Ratle Kiru Power Transmission Ltd” to develop an ISTS-TBCB scheme for hydropower evacuation from projects in UT of J&K. (Read more).
Five more SPVs expected
On October 1, 2024, the board of REC had approved the incorporation of eight project SPVs for development of as many ISTS-TBCB projects where RECPDCL is acting as the bid process coordinator.
With three SPVs already incorporated, as discussed above, the remaining five are likely to be incorporated in the near future. These five SPVs will relate to the following ISTS schemes:
- Network Expansion scheme in Western Region to cater to Pumped storage potential near Talegaon (Pune)
- Transmission system for Augmentation of transformation capacity at 765/400kV Lakadia Substation (WRSS XXI (A) Transco Ltd) in Gujarat – Part B
- Augmentation of transformation capacity at KPSI (GIS) and KPS2 (GIS) (Phase-V, Part B1 and Part B2 scheme)
- Transmission system for proposed Green Hydrogen/Green Ammonia project in Tuticorin area
- Augmentation of transformation capacity by 3x500MVA, 400/220kV lCTs (6th – 8th) & 1x1500MVA, 765/400kV lCT (4th) at Bidar PS
It may be noted that bidding for all the eight schemes under discussion is currently underway.
Significance of project SPVs
For ISTS and InSTS schemes that are developed under the TBCB modality, bid process coordinators – RECPDCL and PFCCL – need to incorporate project special purpose vehicles (SPVs) as their wholly-owned subsidiaries. These SPVs carry out pre-project activities, as envisaged in the overall mandate of the BPCs. Once the tariff-based bidding process is completed and the successful developer is selected, these SPVs, with all their assets and liabilities, are handed over to the respective winning developers. The formal acquisition of the project SPV by the project developer from the BPC signifies the end of the BPC’s role in the ISTS-TBCB project. The date on which this formal transfer/acquisition takes place is also technically significant as the gestation period of the ISTS-TBCB scheme is measured from this date.
Featured photograph (source: Godrej & Boyce) is for representation only
