Financial Daily from THE HINDU group of publications
Thursday, Mar 17, 2005
Financial Daily from THE HINDU group of publications Thursday, Mar 17, 2005 |
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Corporate
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Outlook Industry & Economy - Power Jaiprakash Hydro plans debt refinance of Baspa project Our Bureau
Bangalore , March 16 JAIPRAKASH Hydro Power Ltd (JHPL) would look for refinancing its debt on the 300-MW Baspa hydel project in Himachal Pradesh. Mr Suren Jain, Director of Jaiprakash Associates Ltd (JAL), the holding company of JHPL, said that refinancing would help bring down its interest burden and consequently reduce the fixed component of the power tariff. The debt component for the project is estimated at Rs 1,088.85 crore, which is inclusive of the foreign currency loan. The average interest on these loans is estimated at 10.5 per cent. Mr Jain said that at this interest rate, the project's first year tariff was estimated at Rs 2.95 per unit or a levelised tariff of Rs 2.09 per unit over the entire 40-year validity period of the power purchase agreement signed with the Himachal Pradesh Electricity. However, with funds from the Power Finance Corporation available at rates as low 7.5 per cent he said interest costs could be brought down further and, thereby, help reduce thelevelised power tariff under Rs 2 a unit. The Baspa project began operating in June 2003. The project is capable of generating 1,300 million units into the grid per annum and the entire power was currently being purchased by HPSEB. The group, he said, hoped to commission the 400-MW Vishnu Prayag project in Uttaranchal next year. He said JAL was already sourcing funds from PFC for the 1000-MW Karcham Wangtoo project in Himachal Pradesh. This project was due to be commissioned in 2010. Once this project is commissioned, he said the group would become the country's largest independent hydel power producer. JAL was also hoping to add another 100 MW of a downstream hydel project for meeting the power trading requirements. About 40 per cent of this merchant power would be utilised for the group's cement plants. The remaining would be offered directly to industrial users in the northern region, he added. Mr Jain said that the company is also examining a proposal of bringing all hydel projects under a single umbrella company. Currently, all three projects are being operated by three different companies. Through this holding company, he said, JAL hoped to bid for more hydel projects in the North-East. Only the project company operating Baspa was tapping the equity market, divesting 36.6 per cent of the promoter stake. The promoters include ICICI Bank, which holds about 29.03 per cent of the total project equity of Rs 491 crore.
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