Tata Power, DVC complete Maithon funding

State Bank of India Group to contribute Rs 1,000 crore.

Maithon Power (MPL), a 74:26 joint venture of Tata Power and Damodar Valley Corporation (DVC) today announced completion of financing for the 1050 Mw coal-based thermal power project being set up in Dhanbad district of Jharkhand.

According to a release issued by Tata Power today, the project, estimated to cost Rs 4,450 crore, is being funded on a debt-equity ratio of 70:30. The debt for the project is Rs 3115 crore, and is being financed by various banks led by State Bank of India (SBI).

The State Bank of India group is taking the largest exposure to the tune of Rs 1,000 crore. The consortium of banks include Allahabad Bank, Bank of Baroda, Canara Bank, Central Bank, Dena Bank, Indian Overseas Bank, J&K Bank, Oriental Bank of Commerce, Punjab & Sind Bank, Tamilnadu Mercantile Bank and UCO Bank, the release added.

Asim K. Barman, chairman, Damodar Valley Corporation, said: "We are happy on this landmark occasion of Maithon project. This public-private partnership is an important initiative towards meeting the power supply needs of the country. For us, the agreement marks a successful trend and offers hope for more such joint initiatives for the power sector in the future."

Prasad R Menon, managing director, Tata Power, said: "The closure of financing for the Maithon project is an important milestone. The attractive financing demonstrates the faith of the lenders in the promoters, their execution capabilities and expertise to complete the project in time. The unique terms of debt financing provides us more flexibility in the execution of the project as well as help in controlling costs."

The project will comprise two generating units of which the first unit of 525 Mw is expected to be commissioned by October 2010 - in time to meet the 2010 Delhi Commonwealth Games requirements. The second unit will be commissioned by March 2011. The long-term coal linkage has been allotted from the mines of Bharat Coking Coal (BCCL) and water allocation is from the adjacent Maithon reservoir.

MPL has also signed power purchase agreements with DVC for 300 Mw, and is the lowest bidder for 309 Mw for distribution licensees of Delhi, the release said.