The Hindu Business Line : Tata Power targets financial closure of Mundra by fiscal-end

Power plans
Mundra project among nine proposed by Govt to up power capacity.
Construction likely to start in the beginning of next year.
The SPV has signed purchase agreements with 7 distribution licencees.

Anil Sasi

New Delhi, Sept. 10 Tata Power Company Ltd is aiming to achieve financial closure for the 4,000-MW Mundra Ultra Mega Project before the end of the current fiscal.

The company would be funding the project through a debt-equity ratio of 80:20, with the option of overseas and domestic debt being considered for shoring up funds for the project, which would entail total investments of up to Rs 20,000 crore, sources said.

Tata Power had earlier appointed SBI Capital Market as its advisor for raising the funds.

While the terms of the bid stipulate commissioning of units starting from the first half of 2012-13, the company hopes to commission the first unit ahead of schedule.

While construction work is likely to start in the beginning of 2008, the first 800 MW super-critical technology-based unit is expected to go on stream by the second half of 2011, sources said.

Coastal project

Tata Power had emerged as the lowest bidder for the coastal project in Gujarat by quoting an average 25-year levelised tariff of Rs 2.26 per unit, beating bids from five other companies. The company acquired the project’s special purpose vehicle — Coastal Gujarat Power Ltd — from Power Finance Corporation in April 2007.

CGPL has signed power purchase agreements with seven distribution licencees for sale of power from the project upon commencement of generation. It also nominated Gujarat Distribution Company as the lead procurer on behalf of all procurers.

The project requires 12 million tonnes of imported coal, of which a significant portion in likely to be sourced from Indonesian coal producers PT Kaltim Prima Coal and PT Arutmin, where Tata power has picked up 30 per cent stake.

While the off-take agreement from the Indonesian coal field entitles Tata Power to purchase about 10.5 million tonnes of coal per annum, the company is likely to allocate only a portion of the coal from those fields for Mundra, while the remaining coal is slated to come from similar deals that the firm is scouting for in Australia and South Africa to diversify the fuel risk.

Tata Power has already placed the contract for complete Boiler Island scope on an EPC basis with Doosan Heavy Industries and Construction Company of Korea. The boiler contract covers nearly 45 per cent of the total order to be placed for the project.

Toshiba Corporation of Japan has been awarded the $400 million turbines order, under which it would supply five sets of supercritical steam turbines and power generators.

The Mundra project is among nine Ultra Mega power projects proposed by the Government to increase national power generation capacity by over 70,000 MW in the next five years.