R-Power's $800-mn loan sanctioned

Four international banks have sanctioned Reliance Power $800 million (Rs 4,432 crore) of debt for its ultra mega power project in Sasan. Memoranda of understanding for these loans were signed during US President Barack Obama’s visit to India in 2010.

While US Exim Bank sanctioned $600 million, the remaining would be provided by Standard Chartered Bank, Mizuho Bank and Developmental Bank of Singapore. Reliance Power says it was decided the loans would be provided at a fixed interest rate of 3.6 per cent a year, and this could help the company save on interest costs.

“This financing, along with financing from Chinese banks, would support import of world-class equipment for this prestigious project,” said Reliance Power chief executive J P Chalasani. The loans would be used to refinance the equipment purchased for the 4,000-Mw ultra mega power project’s captive coal mine. Most of the equipment was purchased from Caterpillar Inc in the US.

The first unit of the Sasan project is expected to be commissioned in December and the coal mine is expected to be operational before that. Earlier, the company had earlier tied up about $1.1 billion (Rs 6,094 crore) from Chinese banks. Equipment for the power plant, such as boiler-turbine and generators, has already been purchased from Chinese suppliers.