Ashoka Buildcon Limited has received a Letter of Intent (LOI) from REC Power Development and Consultancy Limited for the establishment of a 400/220/132 kV AIS Sakoli project. The project, awarded on a Tariff Based Competitive Bidding basis, is valued at approximately ₹1265.37 Million annually for 35 years, representing annual transmission charges. The scope includes a 24-month completion period and a 35-year operation and maintenance phase.
Ashoka Buildcon Secures Key Power Project LOI
Ashoka Buildcon Limited has announced the receipt of a Letter of Intent (LOI) from REC Power Development and Consultancy Limited for a significant infrastructure project. This development marks a crucial step in the company’s expansion within the power sector.
Project Details and Value
The LOI pertains to the establishment of a 400/220/132 kV AIS Sakoli project, located in the Bhandara district. This project was awarded through the Tariff Based Competitive Bidding (TBCB) mechanism. The broad consideration for this contract is estimated at ₹1265.37 Million annually, intended to cover transmission charges over a period of 35 years. A Performance Bank Guarantee of ₹16.70 Crore is required within 10 days of the LOI issuance.
Project Timeline and Scope
The project mandates a 24-month completion period from the effective date. Following the construction phase, Ashoka Buildcon will be responsible for the operation and maintenance of the facility for an extended period of 35 years. This long-term commitment underscores the substantial nature of the contract and its future revenue streams.
Company’s Position and Future Outlook
This LOI is a testament to Ashoka Buildcon’s capabilities in undertaking large-scale power infrastructure projects. The company has also confirmed that there are no promoter group interests in REC Power Development and Consultancy Limited, and the transaction is expected to be conducted at an arm’s length basis, aligning with standard corporate governance practices.
Source: BSE