The Hindu Business Line : JSW Energy Barmer thermal project achieves financial closure

Estimated to cost Rs 5,000 crore, the project will be financed in a debt equity ratio of 3:1. A consortium of 12 banks and financial institutions is participating in providing a rupee term loan totalling Rs 3,750 crore with JSW Energy committing to provide the entire 25 per cent equity requirement of Rs 1,250 crore.

Raj West Power Ltd (RWPL), promoted by JSW Energy, is setting up the project.

The power plant will be a pit head-based project with the lignite being procured from Barmer Lignite Mining Company Ltd, a joint venture between Rajasthan State Minerals & Mining Co Ltd (RSMML) holding 51 per cent and RWPL 49 per cent.

The power generated will be sold to three distribution companies (Discoms) in Rajasthan - Ajmer Vidyut Vitran Nigam Ltd, Jaipur Vidyut Vitran Nigam Ltd and Jodhpur Vidyut Vitran Nigam Ltd.

The company has already entered into a Power Purchase Agreement (PPA) with the Discoms for sale of power on long-term basis. The tariff payable by the Discoms would be fixed in accordance with the tariff orders of RERC.

Mr N.K. Jain, Vice-Chairman, JSW Energy, said the project would be completed in 2008-09 (135MW X 8) and that work at site had begun.

The cost of loan would be in the range of 11.25 to 11.50 per cent and given the long-term power purchase agreement entered into, the per unit cost would be Rs 2.35 in the first year.

The deal has been structured and syndicated by ICICI Bank Ltd, the sole financial advisors & arrangers to RWPL, for the transaction. The total debt requirement has been financed by ICICI Bank, Rural Electrification Corporation Ltd, India Infrastructure Finance Company Ltd, Punjab National Bank, Bank of India, Canara Bank, Life Insurance Corporation of India, Infrastructure Development Finance Company Limited, IDBI Ltd, United Bank of India, Indian Bank and Vijaya Bank.