In the interest of protecting 1,000 American jobs, the US Exim Bank has agreed to extend a $600 million loan guarantee to Anil Ambani-led Reliance Power's ultra mega project at Sasan in Madhya Pradesh -- reversing its earlier decision.
Last Thursday, the Export-Import Bank of the United States (US Exim) had rejected a request from Reliance Power to finance the $4.5 billion project at Sasan on environmental grounds.
The 3,960 MW coal-fired power project is projected to emit 26,000 to 27,000 tonnes of carbon dioxide per annum.
The loan guarantee is for US-made mining equipment that Reliance Power has contracted to purchase from Wisconsin-based Bucyrus International.
The sales agreement was contingent upon the Indian firm receiving US Exim-supported financing.
"I'm glad that the US Export-Import Bank reversed its decision and extended loan guarantees to Bucyrus International, Inc," said Congressman Jim Sensenbrenner, who is the Ranking Republican on the House Select Committee on Energy Independence and Global Warming.
Sensenbrenner, who had written to President Barack Obama seeking his support for the US Exim loan guarantee, said, "This will create hundreds of sorely-needed jobs for Milwaukee (in Wisconsin) residents. But we shouldn't let the reversal obscure the bad policy that led to it."
However, he slammed the "job-killing cap-and-tax agenda" of the US Government. "If President Obama continues to push a job-killing cap-and-tax agenda, job losses will be a thousand times worse," he said.
The cap-and-tax is a measure taken to encourage green jobs.
Sensenbrenner, who is considered an influential lawmaker, quoted the National Association of Manufacturers as saying that the cap-and-tax would cost the economy more than 1 million manufacturing jobs over the next two decades.
Several US lawmakers had also written to US Exim, stating that denial of loan guarantees to Bucyrus International would kill about 1,000 American jobs.
"We are very pleased with the decision of the US Export-Import Bank to change course and support this project," Bucyrus CEO Tim Sullivan said.
He said that with the loan guarantees, jobs would be retained across 13 US states. "This is great news for Bucyrus, but more importantly, it is great news to be keeping this work in the US and providing job opportunities across 13 states," he said.
