Idbi Reduces Gautami Power Loan To Rs 350 Crore

The Industrial Development Bank of India (IDBI) has reduced the loan sanction to the 455-mw Gautami Power Project to Rs 350 crore.

The financial institution had earlier sanctioned Rs 409 crore to two separate projects, NCC Constructions (239 mw) and Gautami Power (359 mw), which merged to form a single power project of 455 mw. The revised project cost of the merged entity is now pegged at Rs 1,325 crore.

The change in the cost and size structure of the project follows the Andhra Pradesh government discouraging the use of naphtha and promoting the use of liquefied natural gas (LNG).

 

In 1999, when IDBI had sanctioned loans to the two projects, both were naphtha-based. As the allocation of gas by the state was not adequate to meet the combined 598-mw capacity, the two entities decided to merge and reduced the size of the project to 455 mw. The gas would be allocated from the Gas Authority of India (GAIL).

Sources said IDBI was funding the foreign currency portion of the loan to the extent of Rs 350 crore for the import of necessary equipment. Of the total capital outlay of Rs 1,325 crore, Rs 400 crore is by way of equity and the balance through term loans.

"The tariff will be the most competitive at Rs 1.77 per unit as it is one of the lowest capital cost project," said the sources.

In March this year, IDBI had sanctioned a loan of Rs 452 crore towards the Kondaseema Power, which has also changed from a naphtha-based project to an LNG-based project.

Of this amount, Rs 400 crore is towards the foreign loan component, Rs 35 crore towards equity and the balance as guarantee assistance, said the sources.