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New Delhi, Dec. 19

Tata Power Company (TPC) on Tuesday said it expects to tie-up funds for the 4,000 MW Mundra Ultra Power project by August 2007. The project entails an estimated cost of about Rs 20,000 crore.

"We hope to achieve financial closure by August," Mr A.K. Sardana, Director of Tata Power Trading, a TPC group company, said.

Construction work is likely to start in January 2008 with the first 800 MW phase of the project expected to be complete in late 2011, he added.

Tata Power had on Monday emerged as the lowest bidder for the Mundra project in Gujarat by quoting an average 25-year levelised tariff of Rs 2.26 per unit, beating bids from five other companies Reliance Energy Ltd, Larsen and Toubro, Essar Power, Sterlite Industries and Adani Group.

Tata Power Company would raise around 70 per cent of the project cost from the debt market, about half of which is expected to come through the external commercial borrowings route, he said. The company is also in talks with players for importing coal for power project from various countries. "The project requires 12 million tonnes of coal," he said, adding that the sourcing of coal had not been finalised yet.

Tata Power Executive Director (Finance), Mr S. Ramakrishnan, had on Monday said that the company has appointed SBI Capital Market as its advisor for raising the necessary funds.

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

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(This article was published in the Business Line print edition dated December 20, 2006)
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