R-Power seeks Rs 11,500-crore syndicated loan

Reliance Power is raising around Rs 11,500 crore via syndicated loans, and $500 million-$600 million (Rs 2,400-2,900 crore) through external commercial borrowings to finance its upcoming ultra mega power project at Sasan in Gujarat, bankers involved with the deal said today.

The fund raising is likely to be completed by February.

The company is setting up the 4,000 MW power unit for Rs 20,000 crore, of which Rs 14,500 crore would be raised through debt. The Anil Dhirubhai Ambani group company had earlier planned to raise Rs 9,000 crore through syndicated loan and the remaining debt requirement was to be raised through ECB. The company had the Reserve Bank of India's approval to raise up to $2 billion (Rs 9,600 crore) of ECB.

"The global financial environment is difficult for ECB. So, the fund raising plan was changed. However, the company has an option where at a later date, it can replace the rupee loan, which is not availed at that time, with ECB, if situation becomes favourable," a banker close to the deal said.

India Infrastructure Finance's overseas arm, IIFCL (UK) would extend the $500 million-$600 million ECB to the project.

The syndicated loan is being raised from a group of Indian banks and financers led by State Bank of India and Rs 8,000 crore has been tied up so far.

Average interest rate on the loans raised is 13-13.5 per cent, while the tenure is 19 years, bankers said.