ADAG ties up Rs 14,500 cr loans for Sasan project
RPL announced that it has tied up Rs 14,500 crore worth of loans to finance its 4,000 mega watt Sasan UMPP in Madhya Pradesh. The cost of the project is estimated at Rs 19,400 crore.business Updated: Apr 21, 2009 22:16 IST
Reliance Power Ltd (RPL) on Tuesday announced that it has tied up Rs 14,500 crore worth of loans to finance its 4,000 mega watt Sasan ultra mega power project (UMPP) in Madhya Pradesh. The cost of the project is estimated at Rs 19,400 crore.
This is the largest debt financing from domestic banks and institutions for any project in any industry in the country, said J.P. Chalasani, CEO of RPL. And it comes at a time when funds are tight in both global and domestic financial markets due to the slowdown, with most large companies deferring or calling off investment plans.
“Even in such a difficult scenario, we have been able to finance the project in just 10 months,” Chalsani said. “This shows the depth of the Indian financial system to fund good projects amidst all kind of concerns.”
Power Finance Corp (PFC), the nodal agency for implementation of UMPPs, has sanctioned Rs 1,770 crore for this project.
“Reliance Power had 100 per cent equity for the project in place, which gave a lot of comfort to the lenders in financing a large-sized project like Sasan,” PFC chairman and managing director Satnam Singh told Hindustan Times. “Lenders are comfortable funding projects where the equity is in place for the project.”
All told, a consortium of 14 banks and financial institutions have funded the debt, on a debt-equity ratio of 3:1.
While SBI is the lead domestic lender for the project, other large domestic banks and financial institutions like IIFCL (India & UK), PFC, Rural Electrification Corp, Punjab National Bank, LIC, Axis Bank and IDBI Bank have joined in.
Sasan UMPP is the largest integrated pit head coal based power project in the country and will supply power at a price that’s the lowest in the country. It will sell power to 14 utilities in seven states —Madhya Pradesh, Punjab, Haryana, Uttar Pradesh, New Delhi, Rajasthan and Uttarakhand — at a price of Rs 1.196 per unit.