RPower to achieve closure for Sasan this month: Power Finance Corp

18 April 2009

The Anil Ambani-led Reliance Power may tie-up the necessary funds for the 4,000-MW Sasan ultra mega power project in Madhya Pradesh this month, according to the Power Finance Corporation.

The PFC had sanctioned Rs1,770 crore for the project and the financial closure is likely by this month-end, its chairman and managing director Satnam Singh told reporters in Mumbai. The PFC is the only government-run lender for power projects, and is the nodal agency for the UMPPs.

Sasan will be the largest domestic coal-based power project in the country, supplying power to seven states across western and northern India. The project is estimated to cost about Rs20,000 crore, to be funded at a debt equity ratio of 75:25. The debt component would be raised by a consortium of banks led by State Bank of India.

Besides Sasan, Reliance Power has also bagged two other UMPPs - Krishnapatnam and Tilaiya - and the three projects together are being set up at an estimated cost of Rs 50,000- 60,000 crore.

The government is likely to announce three more UMPPs in Orissa, Tamil Nadu and Chattisgarh and request for qualification is expected to be floated over the next few months, according to Singh.

Asked whether the government would cap the number of UMPP projects for which a single company can bid, Singh said there would be no cap but added that it would call for increased performance guarantee in such cases.