Cabinet To Clear PPA And PSA In Madhya Pradesh

22 May 2026 CW Team

The change responds to concerns about fiscal pressure arising from long term and mid term contracts, which the government considers to have imposed an avoidable financial burden under the old system. The administration has required finance department approval in such cases to ensure that obligations are consistent with budgetary priorities and that procurement aligns with actual demand. The cabinet will undertake a review of proposed agreements to determine whether they are in the state interest before any commitment is made.

The government has received proposals for energy generation and storage that include biomass, solar battery storage, pump hydro storage and nuclear options, and these will be evaluated under the revised approval process. The board’s decision followed an assessment of current energy availability and projected requirements, and officials have indicated that procurement will be informed by demand forecasts and system planning. Additional Chief Secretary (Energy) Neeraj Mandloi conveyed that the board acted after considering both present supply conditions and future needs.

The cabinet review will test each proposal for cost effectiveness and strategic fit, and the finance department sign off will serve as a further fiscal safeguard. The policy aims to balance the urgency of securing reliable supplies with the need to protect the state finances from long term liabilities. Finalisation of any PPA or PSA will be contingent on sequential clearances by the energy minister, the chief minister and the cabinet before contractual commitments proceed.

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The state will execute power purchase agreements and power supply agreements only after cabinet approval following a resolution by the board of the MP Power Management Company. The board decided that such pacts will not be finalised until they obtain endorsement from the energy minister and the chief minister and that implementation will proceed through established government channels. The arrangement marks a shift from the earlier practice under which the board approved agreements without subsequent cabinet clearance. The change responds to concerns about fiscal pressure arising from long term and mid term contracts, which the government considers to have imposed an avoidable financial burden under the old system. The administration has required finance department approval in such cases to ensure that obligations are consistent with budgetary priorities and that procurement aligns with actual demand. The cabinet will undertake a review of proposed agreements to determine whether they are in the state interest before any commitment is made. The government has received proposals for energy generation and storage that include biomass, solar battery storage, pump hydro storage and nuclear options, and these will be evaluated under the revised approval process. The board’s decision followed an assessment of current energy availability and projected requirements, and officials have indicated that procurement will be informed by demand forecasts and system planning. Additional Chief Secretary (Energy) Neeraj Mandloi conveyed that the board acted after considering both present supply conditions and future needs. The cabinet review will test each proposal for cost effectiveness and strategic fit, and the finance department sign off will serve as a further fiscal safeguard. The policy aims to balance the urgency of securing reliable supplies with the need to protect the state finances from long term liabilities. Finalisation of any PPA or PSA will be contingent on sequential clearances by the energy minister, the chief minister and the cabinet before contractual commitments proceed.

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