Tata Power to raise Rs 14K cr for Mundra

Tata Power Company (TPC), the country's biggest private power utility, would raise up to Rs 14,000 crore in loans to fund the Rs 18,000 crore ultra mega power project in Mundra in coastal Gujarat. The company had appointed SBI Capital Markets as head arranger for the funds, said S Ramakrishnan, executive director, finance.

The remaining Rs 4,000 crore would be funded through internal resources. Besides, the company is also in talks with Asian Development Bank (ADB) and International Finance Corporation (IFC) for raising a part of the Rs 14,000 crore.

"ADB and IFC are also keen on picking up stake in the Mundra project," Ramakrishnan said.

The Tata group company is also considering the option of having the project part-funded by export credit agencies.

TPC is in talks with SBI and Power Finance Corporation for funding the Rs 4,600 crore 1,000 mw power project at Maithon, in which the power utility holds 74 per cent stake, while Damodar Valley Corporation owns the rest. The debt-to-equity ratio for this project is 70 to 30, according to Ramakrishnan.

For the $1.2 billion acquisition of coal blocks in Indonesia's Bumi Resources, TPC has set up two special purpose vehicles in Mauritius and Cyprus. A non-recourse loan worth $600 million would be raised for the purpose of the acquisition that took place in April this year.

This loan would not reflect on the company's account books, Ramakrishnan said.

TPC is also taking a recourse loan worth $350 million for financing the Bumi Resources acquisition. A part of the acquisition would also be funded through a $200 million foreign currency convertible bond issued by the company in 2005. TPC's equity share of the project would be $250 million.

In the current financial year, TPC has planned capital expenditure of Rs 2,670 crore for their projects in Trombay, Haldia and in adding capacity to their wind power and digiset generating systems.

The capex would increase further to Rs 4,800 crore if joint venture projects like the Maithon power project are taken into consideration, Ramakrishnan said.