The Hindu Business Line : Tata Power, DVC wrap up Maithon Power project financing

Maithon Power Ltd (MPL), a 74:26 joint venture between Tata Power and Damodar Valley Corporation (DVC), on Tuesday announced completion of its financing for the 1,050-MW coal based thermal power project being set up in Dhanbad District of Jharkhand.

The project, which is estimated to cost Rs 4,450 crore, is being funded on a debt-equity ratio of 70:30. The promoters — Tata Power and DVC — would bring in equity of 74 per cent and 26 per cent respectively.

Tata Power said the debt for the project was Rs 3,115 crore, which would be financed by various banks led by State Bank of India (SBI). SBI Capital Markets Ltd (SBICAP) is the sole financial advisor and arranger of debt for the project.

The syndication was over subscribed by nearly Rs 1,050 crore with the SBI group taking the largest exposure to the tune of Rs 1,000 crore. The consortium of 17 banks includes Allahabad Bank, Bank of Baroda, Canara Bank, Central Bank, Dena Bank, Indian Overseas Bank, Oriental Bank of Commerce and UCO Bank.

Finances

With a power deficit facing the country, Tata Power and DVC have infused equity in excess of the upfront equity requirement as stipulated by the lenders, the company said. The promoters have allocated the funds prior to the financial closure to ensure that the project is commissioned on time.

Mr Prasad R. Menon, Managing Director of Tata Power, said:

“The closure of financing for Maithon project is an important milestone. The unique terms of debt financing provides us more flexibility in the execution of the project as well as help in controlling costs.”

preparatory works

MPL has obtained all major clearances and permits for the project. The site preparatory works are in progress and orders for main equipments have been placed.

The project will comprise two generating units of which the first unit of 525 MW is expected to be commissioned by October 2010 to meet the 2010 Delhi Commonwealth Games requirements. The second unit will be commissioned by March 2011.

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