Essar Energy said it will sign a power purchase agreement (PPA) with the Bihar State Electricity Board (BSEB) for 300MW of contracted capacity from its 1,200MW Tori I power station under construction in the Indian state of Jharkhand.

The company’s subsidiary Essar Power Jharkhand has been issued a letter of intent by BSEB to buy the electricity over a 25-year period.

A binding PPA is expected to be signed within two months and the supply of electricity under the PPA is anticipated to begin from May 2015.

Tori I is a coal-fired power project consisting of two units each with a power generating capacity of 600MW.

Essar Energy chief executive Naresh Nayyar said this PPA will be the latest demonstration of the progress Essar is making in securing revenues from its investments in power generation in India, where it has 1,600MW of capacity operational and another 8,070MW under construction.