JITPL seeks Idco's nod for land mortgage

Company to raise Rs 1,455 cr debt for its 1,800 Mw plant

Jindal India Thermal Power Ltd (JITPL) has approached Odisha Industrial Infrastructure Development Corporation Ltd (Idco) to give it permission for creating mortgage for 1029.84 acres land at the site of its 1,800 Mw coal-based power plant at Derang near Angul.

Idco’s permission to mortgage the land will enable the company to raise Rs 1,455 crore loan.

The stalemate on mortgage of land leased out by Idco for industrial projects had ended with the state government coming out with a notification saying the state-owned company is competent to give permission for creation of mortgage.

According to the notification, while granting permission for mortgage, the same has to be examined and approved by the Idco board of directors on case-to-case basis.

The permission for mortgage will be issued only for the purpose of financing the project for which the land has been alloted. The financial institution will also ensure that the sanctioned loan is utilised for the project on the leased land and in the event of default in repayment of loan by the lessee, the financial institution or the bank concerned would seek clearance from Idco for take over of the asset.

JITPL had originally proposed to set up a 1,200 MW power plant at Derang on 1,055 acres of land. Out of the required land, 262 acres  belonged to the government while the remaining 793 acres were with private owners.

The company has been alloted the Mandakini coal block with a reserve of 96.84 million tonnes of coal.

The company had later proposed to expand its capacity to 1,800 MW and the proposal was cleared by the state authorities.

JITPL has been alloted 40 cusecs of water from the Brahmani river. The company has achieved financial closure for the first unit.

The state government recently extended the memorandum of understanding (MoU) with JITPL considering the good progress made by the company on its power plant.

According to the revised MoU, JITPL cannot dilute its stake holding to below 51 per cent for at least three years from the date of commencement of their operations. Also, any stake sale beyond this lock-in period will need prior permission of the state government.

In addition, the company has to comply with the mandatory clause to promote employment among locals that includes reservation of 90 per cent jobs for locals in the unskilled and semi-skilled category.