Karnataka Power Corp gets Rs 1680 cr syndicated loan from consortium

A consortium of 21 banks and financial institutions has committed a rupee term loan, aggregating Rs 1,680 crore, to the state government-owned, Karnataka Power Corporation (KPCL) in Bangalore yesterday.

The deal has been syndicated by SBI Capital Markets Ltd (SBI Caps) and Punjab National Bank, the joint advisors and arrangers to KPCL for this transaction.

The term loan for KPCL's first 500 MW power station at Ballery infuses the much needed impetus to the development of the power sector in the state.

The project is projected to have a levelised tariff of Rs 2 per kWh, which is substantially lower than Rs 2.50 per unit as recently agreed to between a majority of lenders for financing new power projects.

The project would thus stand KPCL in good stead enabling it to be competitive in the power sector of the country, the corporation said in a press statement.

K Jyothiramalingam, managing director of KPCL said that the deal reposes the faith of the banking community in KPCL as this is the single largest transaction of a syndicated borrowing by the corporation.

KPCL, wholly owned by the state government, has an installed capacity of 4,350 MW which represents over 70 per cent of the installed capacity in Karnataka.

SBI Caps has assisted KPCL in structuring the term loan proposal, which has enabled KPCL to raise the 14 year tenor loans at 7.5 per cent.