Financial Daily from THE HINDU group of publications
Thursday, Mar 28, 2002

Port Info

Group Sites

Industry & Economy - Power
Money & Banking - Private Banks

Federal Bank loan for Raichur thermal unit

Our Bureau


THE private sector Federal Bank has sanctioned a term loan of Rs 25 crore for financing unit VII of the 210 MW Raichur Thermal Power Station.

A press release here today said, that the loan is priced at 11.5 per cent with a tenor of 13 years and is to be guaranteed by the State Government. This rate is currently a spread of about 400 basis points over Sovereign Government paper of an identical maturity profile. This pricing is also close to the coupon of another State Government backed bond issue — the Krishna Bhagya Jala Nigam Ltd.

Unit VII, it may be recalled, has so far not attained financial closure and is being funded through bridge and terms from banks.

This is because the State Government has failed to meet the conditions precedent in the multipartite agreement signed with the lead arranger, Infrastructure Development Finance Company Ltd. Some of the conditions involved creation of a reform fund out of disinvestment proceeds from the distribution companies and State Government's divestment from Karnataka Power Corporation Ltd. Besides, the power purchase agreement for the project has still not been approved by the Electricity Regulatory Commission.

The total cost of the Unit VII is estimated to be Rs 613 crore, inclusive of interest during construction.

The debt requirement accordingly is in the region of about Rs 490 crore. But debt requirement could escalate since one of the lending institutions, ICICI, has backed out a lease financing deal with the project.

Send this article to Friends by E-Mail

Stories in this Section
Fresh tax proposals to garner Rs 690 cr -- TN Seeks Rs 3,000 cr grant from Centre

Budget signals reforms zeal
TN Budget: Many items to attract entry tax
TN: Food subsidy bill trimmed
TN to stop sale of cheap liquor
Planters disappointed
Extension of entry tax gets thumbs down
Roll-back entry taxes: CODISSIA
TN Budget proposal take cement makers by surprise
Karnataka: Call to improve revenue collection
Pollution control award
Karnataka: `Excise revenue increasing'
India `hesitant' towards international competition
AP: Smoking in public places banned
Orissa plans civic bond route to raise Rs 250 cr
New cell to replace OCC
NELP third offering covers 27 blocks
NPPA seeks WHO help on medicine costs
Kerala: Power sector to go in for BOT scheme
Federal Bank loan for Raichur thermal unit
Empty purse forces power sale
Tax-free bonds to settle TNEB dues
ICAI plea on easier income norms for trusts
Karnataka: Computers for Govt schools
Kerala: School closure move flayed
Electrical gear makers aim at doubling exports by 2003
AP: Registration must for pvt hospitals
Construction gets a body to lobby
The buzzword is `rightsizing'
Textile exporters resent high air freight charges
TN: Panel soon to draft divestment norms
AP: Bidders meet for co-op mills
The year of international salesman
Stick to word, union tells Kerala Govt
NTPC `influenced' by big industry
Need for honest bureaucracy stressed
Thiruvananthapuram Engagements
Hyderabad Engagements
Bangalore Engagements
Cardiac diagnostic lab for the poor
Norms eased for exporting goods to fairs abroad
RBI raises EEFC limit to aid ECB prepayment

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line