Rural Electrification Corporation Limited (REC)has sanctioned a term loan of Rs3,796 core to the NTPC Tamil Nadu Power Company, a 50:50 joint venture beyween NTPC and the Tamil Nadu Electricity Board, one of the highest sanctions for financing a power generation project by REC.
As against the normal practice of project financers funding such mega project through the finance consortium route, REC has opted to fund the entire project single-handedly.
The project will be commissioned in the 11th plan and is likely to add 1000 MW thermal generation capacity to the state of Tamil Nadu and would contribute significantly to development of power infrastructure in the state.
The memorandum of understanding confirming REC's commitment to the project was signed recently in Chennai by A Veluchamy, chief project manager, REC and Radha Krishnan, chief executive, NTPC Tamil Nadu Thermal Power Company.
REC has entered into an memorandum of understanding with TNEB to provide project finance support worth Rs16,000 crore for the TNEB proposed 3000 MW generation capacity addition and related transmission and distribution network development schemes proposed to be implemented during the 11th plan period.
The project is coming up at Kuruvimedu village, at Ennore near Chennai. The first unit is expected to be commissioned in 2010-11.
The entire project is being undertaken by BHEL. When commissioned, this will be the first 500 MW Thermal Unit in Tamil Nadu.