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Anil Ambani-promoted Reliance [Get Quote] Power is likely to announce the financial closure of its 3,960-Mw Sasan ultra mega power project (UMPP) in a few weeks.
The company was hopeful of achieving this in 2008 itself but could not do so due to the global financial meltdown post September.
The financial closure is likely despite the writ petition filed by Tata Power [Get Quote] in the Delhi High Court challenging the permission granted to the company to use the coal mines meant for the Sasan project for other projects.
Senior Reliance Power officials said the company had been able to tie up over Rs 12,000 crore for this pithead-coal project in Madhya Pradesh. The project is worth over Rs 20,000 crore (Rs 200 billion).
Company executives said a consortium of banks led by State Bank of India [Get Quote], Power Finance Corporation [Get Quote], Axis Bank, Rural Electrication Corporation and India Infrastructure Finance Company has committed over Rs 12,000 crore (Rs 120 billion) for the project.
"We are talking to a group of banks for another Rs 2,500 crore (Rs 25 billion) and this will be finalised in the coming days," said an executive. The project will have a debt-equity ratio of 70:30.
"The closure should happen within a few weeks. We have time until at least July this year for achieving financial closure according to our contractual obligation," claimed a top-level executive.
This is the largest integrated power project and the first one with captive coal mines being financed in India.
Ultra mega power projects are to achieve financial closure within 14 months of the issue of the letter of intent (LoI), or within 12 months of transfer of the special purpose vehicle (SPV) for implementing the project, or within six months of handing over of the land, whichever is the latest.
The LoI for Sasan was signed on August 1, 2007, and Sasan Power Ltd (SPL) -- the SPV to implement the project -- was handed over to Reliance Power a week later. However, the land transfer has not been fully completed.
"We still have time. We expect transfer of land to be completed soon. If it happens this month, even then we have time till July for financial closure," said the company executive.
So far, 1,860 acres of land, which comprises 780 acres private land, about 300 acres government land and another 780 acres forest land, have been transferred to SPL. Only 152 acres is left and it is expected to be
transferred within a few weeks, say officials.
In September last year, a special Forest Bench of the Supreme Court headed by Chief Justice KG Balakrishnan had given the go-ahead to procurer Madhya Pradesh Power Trading Company (MPPTC) and Sasan Power for diversion of 320.93 hectares of forest land.
Company officials said equipment orders worth over Rs 2,000-3,000 crore (Rs 20-30 billion) had been placed.
The company hopes to commission the first unit in 2011-12, ahead of schedule. According to the new schedule, the commissioning of the first unit will be advanced by 16 months to December 2011, as against May 2013.
The second unit will come after three months, in March 2012. Reliance Power plans to commission 1,320 Mw in the Eleventh Five-Year Plan.
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