Jindal Power ties up Rs 10,057 cr loan for 2,400 Mw unit
Press Trust of India / New Delhi Apr 06, 2010, 16:45 IST
Industrialist Naveen Jindal-led Jindal Power today said it has tied-up Rs 10,057 crore debt from a group of lenders led by State Bank of India to part finance its about Rs 13,400 crore power plant in Chhattisgarh.
"A consortium of 23 lenders led by the State Bank of India sanctioned Rupee Term debt of Rs 10,057 crore on March 26, 2010, to Jindal Power Limited (JPL) for its 2,400 MW Power Project being implemented at Raigarh, in Chhattisgarh," the firm said in a statement here.
Jindal Power said that the project would entail a total investment of Rs 13,410 crore, which would be funded through the debt raised and the company's internal accruals.
"The project envisages a total outlay of Rs 13,410 crore, which is to be funded in a debt equity ratio of 3:1 with a Rupee Term Loan of Rs 10,057 crore and Equity/internal accruals of Rs 3,353 crore," it added.
Jindal Power, a subsidiary of Jindal Steel and Power Ltd (JSPL), said the Term Loan facility has a tenor of about 14 years.
The firm had in December last year filed draft prospectus with market regulator SEBI to raise Rs 7,200 crore through its maiden public issue to partly fund its growth programmes.
The company further said that under the transaction (term loan), SBI Capital Markets Ltd (SBICAP) has implemented a unique two-tranche financing structure, so as to meet the requirements of both JPL and the lenders.
"...The transaction is a blend of Project Finance and conventional debt financing, arriving at an optimal risk allocation structure between JPL and the lenders.
"This accords more flexibility to JPL for its other borrowing programmes by isolating the project risk, and at the same time the lenders derive comfort from JPL balance sheet," it added.
Jindal Power has set up the country's first mega power project – the 1,000-MW O P Jindal Super Thermal Power Plant at Raigarh, in Chhattisgarh. It plans to invest Rs 65,000 crore in the new power projects to take its production capacity to 10,500 MW likely in the next 7-8 years.
Way to power plant is not easy and Jindal is facing manifold problems. 2400 MW power plant is proposed on coal block area allotted to Chhattisgarh Mineral Development Corporation who declined Jindal's application to issue NOC in February 2010. Ministry of Coal is also against establishment of industries on coal bearing areas. In a similar case NTPC had to shift its proposed 1980mw thermal power plant in Jharkhand's Hazaribagh district because the site was over a huge coal reserve.
Government of Chhattisgarh has banned sale-purchase, diversion, construction of permanent nature in 63 Sq km coal block area allotted to CMDC. If site is changed Jindal may face problem getting environmental clearance from Ministry of Environment & Forests. Company also commenced work on this project which is not permissible under environmental laws and Jindal Power Ltd may be sued in court by Chhattisgarh State Pollution Control Board
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