New Delhi, March 28 (IANS): An investment agreement has been entered into among Mahan Energen Limited (MEL), a wholly owned subsidiary of Adani Power Limited (APL), Reliance Industries Limited (RIL) and APL, in terms of which RIL has agreed to subscribe and MEL has agreed to allot 5 crore equity shares with face value of Rs 10 each to RIL at par.

RIL said in a filing that the proposed investment by the company is in compliance with the provisions of Electricity Rules, 2005 in terms of which the company, as a captive user, is required to own 26 per cent proportionate ownership in one unit of MEL of 600 MW capacity, with RIL being the captive user of 500 MW generation capacity.

RIL and MEL have entered into a 20-year long term power purchase agreement for this purpose, RIL said.

MEL, a company engaged in generation and supply of power, was incorporated on October 19, 2005. The turnover of MEL, as per its audited standalone financial statement, for financial years 2022-23, 2021-22 and 2020-21 was Rs 2,730.68 crore, Rs 1,393.59 crore and Rs 692.03 crore, respectively.

“The investment is not a related party transaction and none of the company’s promoter/promoter group/group companies have any interest in the said investment," RIL said.

"The investment is subject to customary conditions precedent including receipt of requisite approvals by MEL and is expected to be completed within 2 weeks of receipt of completion of conditions precedent and receipt of such approvals by MEL,” RIL said.