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US Exim threatens to encash Rs 14.01 billion FI guarantee

The US Exim Bank, an offshore lender of US energy major Enron's Dabhol Power Company, has threatened to encash an approximate Rs 14.01 billion ($298.2 million) guarantee forwarded to it by the Industrial Development Bank of India-led consortium of Indian financial institutions to the project.

"We may require to draw upon the guarantees given to us by the Indian public sector FIs. If DPC finds itself in a position, where it lacks the financial resources with which it could service or repay the loan advanced to it by us," the US Exim Bank submitted before the Bombay High Court in its application for intervention in DPC's petition challenging the Maharashtra Electricity Regulatory Commission's order.

Meanwhile, the Maharashtra State Electricity Board on Saturday refused to commence its offtake of power from DPC's 740 mw first phase even as it gears up for load shedding in the state from September 20, due to power shortage.

"DPC power is an expensive proposition, especially when I am getting a mere 42 paise per unit in return for the costly power that is bought from the multinational to the tune of Rs 8.8 per unit," MSEB chairman Vinay Bansal said.

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