JPL achieves financial closure for 2,400MW Raigarh project
07 Apr 2010
Jindal Power Ltd (JPL) has achieved financial closure for its 2,400 MW power project at Raigarh, Chhattisgarh, for which it is seeking to raise Rs10,057 crore as long-term loan with a repayment period of 14 years.
The Naveen Jindal-led company's proposed power project has a capital outlay of Rs13,410 crore. The balance fund requirement of Rs3,353 crore will be met through internal funds, Jindal Power statement.
A 23-member consortium led by the State Bank of India has pledged to extend debt to the company at an average 10.5 per cent per annum. SBI Capital Markets is the sole financial advisor to the company in the deal.
According to the company, SBI Capital Markets has implemented a unique two-tranche financing structure for the project.
The transaction combines aspects of project finance and conventional debt financing to arrive at an optimal risk allocation structure between JPL and the lender consortium.
The arrangement offers greater flexibility to JPL for its other borrowing programmes by isolation of project risk. The lenders on their part derive comfort from the company's balance sheet.
JPL, a wholly-owned subsidiary of Jindal Steel and Power (JSPL), is currently operating a 1000 MW thermal power plant at Tamnar, Chhattisgarh. Additionally, the company is putting up a 1980 MW power project in Jharkhand, which is expected to achieve financial closure shortly.
The company has also signed a memorandum of understanding with the Jharkhand government for another 2,640 MW installed capacity thermal power project.
The completion of the projects would see the company's installed capacity rise to 8,000 MW. The company also has plans to set up a 6,100 MW power project in Arunachal Pradesh. It is also in the process or raising Rs7,200 core through an IPO.