The Hindu Business Line : GVK’s Uttarakhand power project achieves financial closure

At a glance
The dollar component is being raised through FCCBs coordinated by Axis Bank.
The PPA was signed in June 2006 with Uttar Pradesh Power Corporation Ltd, valid for 30 years.

Our Bureau

Hyderabad, Aug. 6 The GVK Group on Monday announced that its arm, Alakananda Hydro Power Company Ltd, (AHPCL), has achieved financial closure for its 330-MW Shrinagar Hydro Electric Project to be set up in Uttarakhand.

The Chief Financial Officer of GVK Power and Infrastructure Ltd, Mr A. Issac George, said “the capital cost of the project is estimated to be Rs 2,069 crore, which will be funded through a debt equity ratio of 80:20. The debt component of Rs 1,655 crore is funded by infusion of Rs 1,494 crore and Rs 161 crore as dollar component. The project will have equity of Rs 414 crore.”

Funding

The dollar component is being raised through foreign currency convertible bonds coordinated by Axis Bank.

Axis Bank (formerly UTI Bank) has syndicated the debt. A consortium of banks and financial institutions have participated.

Power purchase agreement

AHPCL is implementing the project in pursuant to an implementation agreement signed in February 2006 with the Uttar Pradesh and Uttarakhand Governments. The power purchase agreement (PPA) for the project was signed in June 2006 with Uttar Pradesh Power Corporation Ltd (UPPCL), valid for 30 years.

As per the PPA, UPPCL has agreed to purchase 88 per cent of the energy generated by the Shrinagar Power Project. The remaining 12 per cent would be supplied free to Uttarakhand. Its levelised tariff is Rs 2.11.

BHEL has been awarded the electro-mechanical works. The plant will be ready for commercial operations by early 2011.

Once the scheme of amalgamation is approved by the Delhi High Court, AHPCL will become a subsidiary of GVK Power & Infrastructure Ltd (GVKPIL), the listed entity, such as Gautami Power before.

GVK set up the country’s first independent power project, the 217-MW Jegurupadu combined cycle power plant, in Andhra Pradesh. The company has invested over Rs 5,000 crore into infrastructure projects and has on hand projects in the pipeline of over Rs 13,000 crore.

Meanwhile, Morgan Stanley & Co International plc, and its arms have informed BSE that they have stepped up investment in GVK Power from 3.4 per cent to 7.02 per cent by purchase of shares from the open market.