Financial closure of major power projects cleared

The government on Wednesday tried to push the financial closure of eight power projects including Reliance Energy's 3,740 Megawatt (Mw) Dadri Combined Cycle and Essar's Vadinar 1,200 Mw project.

In addition, 10 power projects, with an installed capacity of over 2,500 Mw, have also achieved financial closure.

The projects, which were reviewed at a high-level meeting convened by the power secretary, also included Birla group's 567 Mw Rosa Thermal Power in Uttar Pradesh and Jaypee's 1,000 Mw Karcham Wangchu Hydel project in Himachal Pradesh.

In addition, Akhakhol combined cycle in Gujarat, 1,000 Mw Mangalore (Nagarjuna) Thermal, Torangallu expansion in Karnataka and 250 Mw Pathadi Thermal (Lanco Amarkantak) in Chattisgarh figured on the agenda.

"Today's meeting was aimed at clearing the hurdles in achieving the financial closure of projects, where the financial institutions have raised objections and want the promoters to do their bit," a power ministry official said.

In case of the Dadri Combined Cycle, the lenders, led by the ICICI Bank, have asked the promoters, Reliance Energy, to improve the debt-equity ratio.

The lenders have, however, agreed to do a joint appraisal of the project to ensure that the project's financial closure was achieved quickly. The process was expected to take another two months to achieve financial closure with the ICICI Bank seeking more time, sources said.

Finance Minister P Chidamabaram said in Parliament that 10 power projects had achieved financial closure since the inter-institutional group under the State Bank of India was constituted in January 2004. Another seven projects were close to achieving financial closure, he added without divulging any names.

The projects which have achieved financial closure in the last few months included Gautami Power's 464 Mw Peddpuram project, a 445 Mw unit by Konaseema EPS Oakwell Power Ltd, Vishnuprayag hydro electric power (400 Mw) by JPVL, Vemagiri Generation Power Ltd's 370 Mw project, GVK Industries' 230 Mw Jegurupadu expansion and Aban Power's 120 Mw Karuppur (Tanjore) combined cycle power project.