Reliance Power's Sasan project achieves financial closure

Sasan Power, a subsidiary of Reliance Power (R-Power), on Tuesday said the financial closure of its ultra mega power project (UMPP) at Sasan in Madhya Pradesh has been achieved after raising debt of Rs 14,550 crore. The company has raised debt from a consortium of 14 banks and financial institutions for the 4,000mw project. 

The Rs 19,400-crore project is funded on a 75:25 basis debt equity ratio. State Bank of India is the lead lender for the project. Other major institutions who have participated in the financing arrangement include IIFCL (India and UK), Power Finance Corporation, Rural Electrification Corporation, Punjab National Bank, LIC, Axis Bank, IDBI Bank, Andhra Bank, Bank of Baroda and Union Bank of India.

"The company has achieved closure within 20 months after handing over the project, which is the largest debt on project finance basis across industries in the country," said J P Chalsani, chief executive of Reliance Power.

The company will get $500 million financing from IIFC UK for Sasan, added Chalsani. However, he declined to reveal details of the financial closure and contribution from each banks. 

The Letter of Intent (LoI) for Sasan was signed with Reliance Power on August 1, 2007.

R-Power has entered into a 25-year power purchase agreement (PPA) with 14 procurers in seven states - Madhya Pradesh, Punjab, Haryana, Uttar Pradesh, New Delhi, Rajasthan and Uttarkhand. The project will supply power at the lowest levelised tariff of Rs 1.196 per kWh (kilowatt hour).

Two units with a capacity of 1,320mw will take off by March 2012 and entire project in 2013, three years ahead of the schedule. Close to 1,950 acres of land have been procured for the project, which requires about 2,000 acres. Engineering, procurement and construction (EPC) contract was given to Reliance Infrastructure in July 2008 and turbines, boilers and generator (TBG) orders were placed with Shanghai Electric of China. The first batch of equipment is ready for shipping and work on TBG construction will begin soon. International consultants such as Black and Veatch, Toshiba, SNC, HOK (Singapore) and STUP are working for the project, said the executive.

He said the pithead based project is the largest integrated pithead coal based power project in India, and one of the largest in the world. R-Power will use most advanced coal mining equipment for coal mining.

The project has been carefully planned around the natural topography and landscapes to build a power plant in a forest. The company has also undertaken initiatives for the sustainable development of local community and has also built a 500-acre township with amenities such as hospital, school, panchayat bhavan and market place, said the official.