Malaysian Firm Picks Up 100% Equity In Tn Power Project

Pembinan Redzai of Malaysia has picked up 100 per cent equity in the 500-mw North Madras thermal power project. The Malaysian company will invest Rs 729 crore in terms of equity in the project. The Foreign Investment Promotion Board has approved the move.

Chennai-based Tri-Sakthi Energy, which was initially promoting the Rs 2,430 crore power plant, has completely withdrawn from the project.

The project will have a debt-equity ratio of 70:30. The debt component is placed at Rs 1,701 crore, while the equity component is estimated at Rs 729 crore, all of which will be picked up by Pembinan Redzai. The debt for the project will largely come through suppliers credit and term loans from Indian and foreign financial institutions. Once the project comes on stream, the company anticipates a foreign exchange outgo in terms of profits and dividends at Rs 183 crore.

 

French equipment major GEC-Alsthom will execute the erection, procurement and construction for the plant. The contract is estimated at Rs 1,700 crore.

The company has approached GEC-Alsthom for arranging a loan through the Export Import Bank of France for financing a part of the debt component, while UK-based West Merchant Bank has agreed to finance part of the debt through export credit guarantee loan. The project has got an in-principle clearance from the Central Electricity Authority (CEA) but is still awaiting the final techno-economic clearance.

It has obtained clearances from the Tamil Nadu government , the SEB and the department of civil aviation. Although the State Pollution Control Board has given clearance to the project, the Union ministry of environment and forests has yet to accord environmental clearance for the project.

The plant will use 1.5 million tonnes of coal per annum as its primary fuel, which will be imported from Indonesia and Australia, while its secondary fuel will be LSHS/Heavy residual fuel. The company has signed an agreement with Bharat Petroleum for the supply of secondary fuel.