The Hindu Business Line : First project to go on stream in 2009: Anil Ambani

Mr Anil Ambani, Chairman of Reliance ADAG, told CNBC-TV18 that February is going to be a great month as they plan to list Reliance Power. He added that first project will go on stream in 2009. He also said that Reliance Power has projects for 28,000 MW.

Excerpts from the exclusive interview:

While the draft prospectus said about Rs 6,000 crore would be used for the six power projects, the amount was later revised to Rs 8,000 crore. Why did you have to increase it?

At the draft stage, there were no price indications, so people did their own calculations. The price band is set at Rs 405-450. The six projects are to cost about Rs 31,000 crore and the issue proceeds amount to Rs 8,000 crore or a little more. The balance Rs 23,000 crore would possibly be debt. Is all of it tied up? If it is, what is the approximate cost?

Yes, I think what we have is the lines of credit approval from the various axiom banks of the world from where we are sourcing equipment on a global basis. We have a large number of Indian and foreign banks who have extended credit facilities to us, and we believe that there is absolutely no challenge in achieving financial closure, because we have gone on a competitive, tariff based bidding, and if you take the Sasan UMPP, it is backed up with state government guarantees, letters of credit, escrow.

So, it is probably a very firm basis of security for the lenders. Reliance Energy brings itself both the Mumbai and the Delhi distribution where we are dependent on close to 6 million customers. And it is unlikely that all 6 million people are going to default on the same day. So, it is a whole package of risk management that we have put together.

But when do you think you will be cash positive in Reliance Power? We are talking about the first project to go on stream in 2009.

40 per cent of the projects require gas. You should have some idea of how your agreement is going because the court had given you a deadline of February to come to some negotiation. Can you update us on this? Directionally speaking, it is now established that there is more gas both for India as a country and for Reliance Industries. That is at one level.

Two is, all gas producers really require strong credit worthy customers who are ready to pay for the gas, take large quantities of gas and convert it into world class power assets, which is what Reliance Power is about to get into. I am quite confident that we will have a win-win solution coming out of this.

So February could be a great month in terms of this agreement?

We don’t know, February is going to be a great month as we plan to list Reliance Power.

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