The project company for the 400MW Maheshwar project in India, has signed an agreement with Madva Pradesh Electricity Board (MPEB), following a supreme court’s decision which upheld the orders of the Madhya Pradesh State government granting escrow back-up to the Maheshwar hydro project.

The agreement is meant to ensure that in the case of a payment default by MPEB for energy purchased by it from the project, the project company could draw funds out of an escrow account, opened by the MPEB for that purpose.

The project company has reached financial closure and hopes to fully commission the hydro plant by March 2003. Bombay-based S Kumars, the promoter for the project, has also signed a memorandum with Ogden Energy of the US, enabling S Kumars to collect (through its south Asian subsidiary) a 49% share in the project company. This portion was until recently, held by Bayernwerke and VEW of Germany. S Kumars, Siemens, and Noell of Germany together hold 51% equity in the Maheshwar project.