Citi to lead mega power lenders

Citibank is keen to lead a consortium of lenders for the ulta mega power projects (UMPPs), for bridging working capital requirements, expansion needs and for providing refinancing facilities.

The power ministry has asked Citibank to prepare a detailed project report (DPR) for financing these projects. "The consortium would have a host of other foreign and Indian banks in the group," power ministry sources told Business Standard.

Given the huge investment required in the ultra mega power projects, the power ministry is keen to involve foreign banks for lending to the UMPPs. While each coal pit head UMPP will require an investment of Rs 16,000 core, it will be Rs 20,000 crore in the case of coastal power plants.

"There will be many such consortiums who will be interested in funding the UMPP projects. Citibank is only one of them," a senior power ministry official said.

Nine ultra mega power projects, of 4,000 mw, have been proposed in Tamil Nadu, Jharkhand, at Ib Valley (Orissa), Krishnapatnam (Andhra Pradesh), Akalatara (Chhattisgarh), Tadri (Karnataka), Sasan (Madhya Pradesh), Mundra (Gujarat), and Girye (Maharashtra). Two of these "" Sasan and Mundra "" will be given to developers selected through competitive bidding by the end of the year.

The lending consortium will come into picture after the projects are handed over to the developers, who are required to ensure financial closure within 12 months.