The Nalco-NPCIL joint venture to set up nuclear power plants will be raising a term loan of up to Rs 1,500 crore over the next three months to fund the construction of the power generation capacities.
The board of the joint venture met in Mumbai last week to take stock of the progress of the plant’s construction. BL Bagra, director (finance), Nalco said: "Initially we are looking for Rs 1,000-1,500 crore funding from various banks. We are in talks with the banks and hope to complete the process in the next two-three months."
NPCIL is Nuclear Power Corporation of India Ltd. As per the JV agreement, Nalco currently holds 26% stake in the company with an option of taking it up to 49%. The rest is with NPCIL.
The total project size is Rs 11,500 crore with the total debt requirement at Rs 7,000 crore and the JV is exploring other options like a bond issue or external commercial borrowings (ECB) as well.
The companies are yet to decide on the quantum of the bond or ECB issue. Since the earnings of the power plants will be in Indian rupees the two will have to set up a hedging mechanism in case of ECB borrowings, Bagra said.
The civil construction is complete by almost 87% and now the supplies of the equipment, etc, will be starting.
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The two are setting up 2x700 MW capacity totalling to 1,400 MW with a deadline of March 2016. However, Bagra said the JV company is trying to hasten the construction and is aiming to complete by the 2015 end itself.
Nalco-NPCIL joined hands to build nuclear power plants in March last year and named the JV 'NPCIL-NALCO Power Company Limited'.
The power plants are coming up in Surat, Gujarat.