CLP India signs Rs1,300 crore ECB financing agreement Jhajjar power plant

CLP India,  wholly owned subsidiary of Hong Kong-listed investor-owned power businesses CLP Group, has entered into a financing agreement with The Bank of Tokyo–Mitsubishi UFJ, Ltd., China Development Bank Corporation, The Export-Import Bank of China, The Hong Kong And Shanghai Banking Corporation Ltd. and Standard Chartered Bank for its 1,320 MW (2x660 MW) power project in Jhajjar, Haryana.

The financing deal makes the jhajjar power project one of the first coal-fired power generation projects in India to be project-financed by a consortium of foreign banks, since the Dabhol power project.

Installed with supercritical technology, the project will be the largest of its kind in CLP's generation portfolio in Asia Pacific and one of India's first supercritical power plants.

The consortium of five lenders is providing approximately $288 million (Rs1,300 crore or Rs13 billion) in financing. This marks a landmark project for India, involving overseas investment in the power industry from banks based out of Japan and China. The total investment in the Jhajjar project – including the financing of the first phase project – amounts up to approximately Rs6,000 croroe.

This deal has also been recognised as the 'Indian Deal of the Year' at the Project Finance International's Annual Awards 2010 – PFI is the leading source of global project finance intelligence.

PFI has termed this deal as the 'curse-breaker' – for more than a decade since the 1990s, international lenders have avoided investing in the power sector of India due to the payment default history experienced then by lenders to the ill-fated Enron power project at Dabhol.