India's MSP Steel and Power limited (MSPL) has signed an agreement with Elevate Solar Energy Private limited (ESEPL) to harness solar power for 25 years, the company said in a statement on Friday, June 19.
Under the agreement, ESPL will supply 10 MW (megawatt) of solar power per year at a fixed price from a solar project being developed by the latter in a central Indian state Chhattisgarh, the statement said.
The long-term agreement aims to increase MSP Steel's renewable energy consumption while providing greater certainty on electricity costs. For energy-intensive industries such as steel production, energy costs represent a significant portion of operating expenses, making long-term renewable energy procurement an increasingly attractive option.
The agreement is structured under a Group Captive model. As part of the agreement, MSPL will acquire a 26% stake in ESEPL, which meets its contracted energy requirements. The proposed shareholding will be subject to a shareholders agreement, which will be executed separately.
MSPL's business verticals include manufacturing facilities for rebar, structural steel, sponge iron, pellets and ferroalloys.
