The Hindu Business Line : KPCL's Bellary plant attains financial closure

SBI Caps and the public sector Punjab National Bank are the lead arrangers for the debt component comprising 80 per cent of the project cost amounting to Rs 1,680 crore.

About 22 banks and financial institutions have participated in the debt syndication.

Speaking to presspersons here after signing the agreement with the banks, Mr K. Jothiramalingam Managing Director of KPCL, said that the loan structuring was done for a period of 14 years at an interest rate of 7.5 per cent. Besides, there is also no call option in the project loan syndication.

However, bankers said that there was a full-fledged payment security mechanism in place, involving assignment of revenues. This was a mechanism that was adopted for funding another project of the KPCL, by the Power Finance Corporation (PFC).

Mr Jothiramalingam said that the Bellary project would be completed by 2006 and would have a levellised tariff of Rs 2 per unit. When completed the project would be able to contribute at least 3,300 million units into the grid.

Referring to KPCL's unaudited results (KPCL is an unlisted company) for the year 2003-04, Mr Jothiramalingam said that turnover for the year was Rs 2,466 crore an 18 per cent increase over the previous year. The income from hydel generation was Rs 333 crore, an increase of only 2 per cent over the previous year. However income from thermal power increased by 21 per cent to Rs 2,133 crore.

The company, he said, was also able to improve its realisation. In 2003-04 of the billed amount of Rs 2,509 crore, the company was able to realise 78 per cent. This ratio, he said, would be improved further in the coming months, once the regulatory norms were fully in place.

The unaudited results showed a net profit of Rs 260 crore in 2003-04 up from the previous year's figure of Rs 240 crore. This was despite the capital expenditure incurred by the company.

However the actual profits could change on basis of the High Court order on the Karnataka Electricity Regulatory Commission, he added.