Tata Power gets Gujarat nod to resume long-term supply from 4-gigawatt Mundra plant

India’s western state of Gujarat has approved a revised power supply pact with Tata Power, clearing the way for the company to resume long-term supply from its 4-gigawatt Mundra plant, according to a government document seen by Reuters.

The imported coal-fired plant has not operated for the past six months after the government last year withdrew the emergency clause that compensates companies for generating power using expensive imported coal.

The deal comes as a relief to India, which is seeking to maximise power output from its coal plants amid an escalating Middle East conflict that is expected to lead to a gas shortage during summer.

The deal still needs approval from the federal power regulator and would take effect retrospectively from April 2025.

The document did not provide details on the exact pricing of the power supply, but Gujarat has mandated that the price must not exceed that paid by other states, according to the document.

Tata Power and the Gujarat government did not immediately respond to emails seeking comment.

The power producer’s shares were up 3.3 per cent in early trade at 411 rupees at 0400 GMT in Mumbai