Two More Power Projects In Tn To Get Escrow Cover

The Tamil Nadu Electricity Board (TNEB) is likely to clear the escrow cover for two more power projects in the state, implemented separately by Balaji Power and SIV Industries.

"The draft version of the escrow cover has already been finalised. Only a few minor points are being clarified," said sources.

At a recent meeting organised by the power ministry in Delhi to take stock of the progress made by independent power producers (IPPs), the TNEB chairman assured some IPPs that the escrow facility would be granted soon.

Sources from the IPPs were confident that the escrow cover will be ready before the end of this month. Both the Balaji and SIV projects are now heading towards financial closure. "We are hoping to complete financial closure latest by November," a Balaji group official said.

Balaji Power's project is coming up at Samayanallur and SIV is setting up its plant at Samalpatti. Both projects are expected to entail investments of about Rs 400 crore each. Work on the escrow other issues related to the IPPs have been speeded up after the recent meeting, sources from IPPs in Chennai said.

Escrow cover for many IPPs have been delayed due to differences between the TNEB and financial institutions. While TNEB has maintained that it has adequate revenue flow to grant escrow cover for projects with a combined capacity of 4,000 MW, FIs are willing to go only upto 2,500 MW.

This difference in the estimation of TNEB's escrow capacity stems from different revenue projections. While TNEB is confident of maintaining a revenue growth of 20 per cent, FIs feel that a 15 per cent growth rate will be more realistic. But the differences between the TNEB and FIs are being ironed out and Escrow cover for the Balaji Power and SIV Industries projects are expected soon.

Talks between Videocon Power and TNEB for an escrow cover for the former's 1,050 MW project are also reportedly in an advanced stage.