The Industrial Finance Corporation of India (IFCI) has sanctioned Rs 400 crore to Videocon Power for its 1,050 mw plant in Tamil Nadu at 3.5 per cent over its prime lending rate (14 per cent) for 10 years.
Sources said the project is likely to achieve financial closure by the month-end. An IFCI official said the project was bankable and the loan is one of the highest sanctioned by the FI to any power project.
Videocon Power had earlier sought a $350 million loan from Hermes (Exim Bank of Germany) and approached the Zurich-based project financing subsidiary of Asea Brown Boveri (ABB) for arranging the syndicated loan through Hermes, which will underwrite the loan.
The balance of the foreign debt amount of about $500 million will be unsyndicated loan and is being arranged by Bank of America.
The syndicated loan for the $1.4 billion power project will be routed through ABB, which has bagged the engineering, procurement and construction (EPC) contract for the project.
The project, which has a debt component of around $1 billion, will be sourcing its $ 350 million from Hermes, $500 million from the Bank of America and the balance from domestic FIs. Videocon Power will be funding 70 per cent of the project through loans, while the balance will be through equity.
ABB has a 45 per cent stake in the project, while the balance is held by Videocon Power. ABB will also be executing the $29 million operation and maintenance contract for the project.
The Central Electricity Authority (CEA) has already granted techno-economic clearance for the 1,050 mw project. Videocon Power plans to offer power to the Tamil Nadu Electricity Board at the rate of Rs 2.62 per unit.
The company would be using Indian coal for its power generation for which it has been allocated a captive coal block in Orissa.
