Tata Power, through its special purpose vehicle -- Coastal Gujarat Power is building the Rs 17,000 crore ultra mega power project at Mundra in Gujarat.
"The financing comprises equity worth Rs 4,250 crore, external commercial borrowings (ECB) of up to $1.8 billion and rupee loans of up to Rs 5,550 crore," said a company statement.
State Bank of India, which has lend Rs 2,000 crore for the project, was the lead bank for the rupee loan. Other lenders to the project include India Infrastructure Finance Company (Rs 1,800 crore), Housing and Urban Development Corporation (Rs 500 crore), Oriental Bank of Commerce (RS 500 crore), Vijaya Bank (Rs 500 crore) and the associate banks of State Bank State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore and State Bank of Indore.
SBI Caps was the financial advisor and mandated lead arranger for rupee loans. The international funding has come from Export-Import Bank of Korea,
International Finance Corporation, Korea Export Insurance Corporation, Asian Development Bank and BNP Paribas.
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"The signing of the financing agreements for Mundra UMPP is an important milestone. The terms of debt financing provides us long tenure of loans supporting our competitive bid price assumptions," said Prasad R Menon, managing director, Tata Power.
The International Finance Corporation (IFC) has lend $450 million to the project for 20 years making this its longest tenure loan. "This includes a grace period of six years. Repayments will start only after six years," said an IFC official, adding that the long-term financing improves the risk profile of the project and complements the commercially available financing from local banks of around 15 years maturity.
The Asian Development Bank has also committed $450 million to the project.
This will be provided in two tranches, with a first tranche of $250 million and the balance "syndicated by ADB to the Export-Import Bank of Korea through a risk participation agreement."
Moving ahead of schedule
The first of the five units of the project (of 800 mw each) is expected to be commissioned in September 2011 while the entire plant is expected to come on stream by the end of 2012, about 14 months ahead of the schedule committed.
The project will generate saleable power of 3800 mw to be supplied to five states Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.
"The site preparatory works are in progress and orders for all major equipments have been placed," statement said.
The company has signed the contract for complete boiler island scope on EPC basis with Doosan Heavy Industries & Construction Company of Korea and contract for the supply of steam turbine generators with Toshiba Corporation.
The project will use super-critical boiler technology that promises more power per quantity of coal. "This results in annual savings of some 3 million tonnes of coal and avoidance of over 28 million tonnes of carbon dioxide emissions in the first 10 years," according to ADB.
IFC said, the intensity of the plant's carbon emissions is expected to be 40 per cent less than the average of existing coal-fired plants in India and 16 per cent less than the average of coal plants in OECD countries.