IDBI to discuss DPC revival with foreign lenders

Foreign lenders could proceed for international arbitration if talks fail.

The Industrial Development Bank of India (IDBI)-led consortium will meet foreign lenders in London on Wednesday for taking over their outstanding dues in the troubled Dabhol power project.

Although foreign lenders OPIC ,Citibank, ABN Amro, CSFB, ANZ Investment Bank, Bank of America, and 19 others have a total outstanding due of over $340 million, IDBI-led domestic lenders are willing to offer only $ 200-250 mn.

Unless the outstanding dues are taken over, domestic lenders cannot proceed with the sale of Dabhol Power Corporation (DPC) to a new sponsor.

The crucial meeting in London follows the coming together of top officials of domestic lenders "" IDBI, ICICI Bank and State Bank of India "" with the Naresh Chandra Committee last week.

Indian lenders were assured of counter guarantee for taking over the outstanding dues of foreign lenders but it will be decided by the new government, official sources said.

The financial institutions plan to set up a special purpose vehicle to take over the outstanding dues of foreign lenders of the 2,184 mw power project estimated to cost 3.0 billion dollars.

The london meeting would be crucial as the lenders could not arrive at a consensus in the earlier meeting in april last week at singapore.