The Hindu Business Line : 4 pvt power projects set for financial closure

FOUR private sector power projects worth Rs 8,437 crore with a total capacity of over 2,000 MW have been finalised for financial closure before March 31, 2004, by leading lenders.

The inter-institutional group comprising State Bank of India, ICICI Bank, LIC, IDBI, IDFC and Power Finance Corporation met the Union Power Secretary, Mr R.V. Shahi, in Mumbai on March 15 to finalise financial closure of these projects.

According to sources, over 11 projects were discussed at the meeting. But only four were selected for financial closure before March 31.

Those selected include the coal-based 550-MW Raigarh (Chhattisgarh) project to be set up by the Jindal group at a cost of Rs 2,141 crore, the gas-based 464-MW Rs 1,450-crore Gautami power project by the GVK group in Andhra Pradesh, Nagarjuna group's 1,015-MW Rs 4,298-crore Mangalore thermal power project and the 100-MW Rs 548-crore Mallana II hydroelectric power project by the Everest group in Himachal Pradesh.

Among other projects discussed were the Vizag-based 1,000-MW Hinduja national power project, BPL's Ramagundam project, STI's Guna (430 MW) power project, North Chennai Power Corporation, and the Maheshwar hydel power project (400 MW).

Most of the projects proposed as independent power producers fall under A, B and C categories as per tariff, fuel linkages and promoters' credibility. Several of the proposed projects have been languishing as they fall under the third category.

Lenders have been concerned about tariff and credibility of promoters floating these projects, as most of the power projects will be funded on the basis of these fundamentals. In January this year, financial institutions and Government guarantees or escrow cover for funding private sector power projects.

The Union Government had originally targeted the financial closure of 18 private sector power projects, with a capacity of over 8,000 MW for this fiscal.