Adani Power Ignites $3 Billion Expansion: 2,400 MW Bihar Project Secures 25-Year Supply Deal

In a landmark development for India’s energy infrastructure, Adani Power Ltd. has secured a Letter of Intent (LoI) to develop and operate a 2,400 MW ultra-supercritical thermal power plant in Bhagalpur, Bihar. The project, valued at USD 3 billion, marks one of the largest private sector investments in the state’s power sector and is expected to significantly boost industrial growth and employment.

The LoI was awarded by Bihar State Power Generation Company Ltd. (BSPGCL), with Adani Power emerging as the lowest bidder in a competitive tender. The company will supply 2,274 MW of electricity to North and South Bihar Power Distribution Companies under a 25-year Power Supply Agreement (PSA), priced at Rs 6.075 per kWh.

Key Highlights of the Announcement

• Adani Power to invest USD 3 billion in a greenfield 2,400 MW thermal power plant
• Project to be located in Pirpainti, Bhagalpur district, Bihar
• Electricity supply commitment of 2,274 MW for 25 years
• Tariff finalized at Rs 6.075 per kWh
• First unit to be commissioned within 48 months, final unit within 60 months
• Fuel supply secured under Government of India’s SHAKTI Policy
• Expected to generate 10,000–12,000 construction jobs and 3,000 operational jobs

Strategic Significance of the Project

Infrastructure and Industrialization

The project is poised to catalyze industrial development in Bihar, a state historically underserved in terms of large-scale energy infrastructure

Reliable power supply will support manufacturing, logistics, and urban development across the region

Technological Edge

The plant will deploy ultra-supercritical technology, known for higher efficiency and lower emissions compared to conventional coal plants

Built under the Design, Build, Finance, Own, and Operate (DBFOO) model, ensuring long-term operational control and accountability

Employment and Economic Impact

Construction phase to create up to 12,000 direct and indirect jobs

Operational phase to sustain 3,000 skilled positions

Local sourcing and ancillary industries expected to benefit from multiplier effects

Financial and Market Implications

Adani Power’s stock (ADAN.NS) is trading at ₹2,275.20, up 0.14 percent from the previous close

Analysts view the project as earnings-accretive over the medium term, with stable cash flows from the 25-year PSA

The tariff structure and coal linkage under SHAKTI Policy reduce fuel cost volatility and enhance margin visibility

The investment aligns with Adani Group’s broader strategy to consolidate its position as India’s largest private thermal power producer

Policy and Regulatory Context

The SHAKTI Policy (Scheme for Harnessing and Allocating Koyala Transparently in India) ensures transparent coal allocation for power producers

The project supports India’s energy transition goals by replacing older, inefficient plants with cleaner ultra-supercritical units

Regulatory approvals and environmental clearances are expected to be streamlined given the strategic importance of the project

Execution Timeline and Milestones

• LoI received in August 2025; LoA (Letter of Award) expected shortly
• PSA to be signed with NBPDCL and SBPDCL
• First 800 MW unit to be commissioned by mid-2029
• Final unit expected to be operational by mid-2030
• Construction to begin post financial closure and regulatory approvals

Conclusion

Adani Power’s $3 billion investment in Bihar marks a pivotal moment for India’s energy landscape. With a 25-year electricity procurement agreement, advanced technology deployment, and robust policy backing, the project promises to deliver long-term value to stakeholders while transforming the industrial profile of eastern India. As execution begins, investors and policymakers alike will be watching closely for progress milestones and broader regional impact.

Sources: Adani Power Media Release, Business Today, Deccan Herald