Tata Power ties up debt for $4.2 bln project

Indian power utility Tata Power Ltd said on Thursday it has signed agreements with a consortium of banks to part fund its upcoming 4,000 megawatt power plant in the Western state of Gujarat. Debt from Indian banks and multilateral agencies would account for three quarters of the project cost, which is estimated at $4.2 billion. Tata Power, part of the diversified Tata group, said in a statement the first of the five power units will be set up in September 2011 and the entire plant would be commissioned by 2012.

The power would be supplied to five states, it said. About $1.8 billion would funded via external commercial borrowings from agencies including the Asian Development Bank (ADB) and the International Finance Corp. Separately, the ADB said in a statement on Thursday it has approved a loan for $450 million for the project. Another 55.5 billion rupees ($1.38 billion) would be rupee denominated loans from Indian financial institutions and the remainder would be equity.

Read more in The Economic Times article.

NTPC in talks with overseas companies for green energy JV

In an effort to acquire expertise it doesn’t currently possess, India’s largest power generation company NTPC Ltd is in talks with foreign firms in the renewable energy business to sell around 40% of its stake in a proposed joint venture (JV) with multilateral lending agency, Asian Development Bank (ADB).

NTPC will hold 40%, ADB, 20%, and the foreign companies will hold 40% in the venture that is part of an effort by the company and the government to reduce, if only marginally, the dependance of the country on fossil fuels such as coal and gas for power generation. The foreign companies are expected to share their expertise in the areas of wind, solar, geothermal and biomass energy generation.The JV hasn't been finalised yet.

Read more in The Livemint article.

PFC to mop up $1 b from overseas mkts

Power Finance Corporation (PFC) is planning to tap the overseas market to raise a whopping $1 billion in the current fiscal. The borrowing programme is aimed at meeting the funding requirements of the power sector, which requires an estimated Rs 8,50,000 crore during the 11th Plan to add 68,869 mw of fresh capacity.

The company also plans to raise Rs 9,000 crore of debt by floating power bonds in the domestic market to get wider retail participation. A portion of it would also be raised through FCCBs.

PFC is a nodal funding agency in the power sector that provides debt and quasi equity to projects. The company was listed in February after an IPO through which it raised about Rs 1,000 crore.

For its overseas borrowings, the company has secured RBI’s approval to raise $500 million through external commercial borrowings (ECBs). The official said after this fundraising exercise, the company would seek the apex bank’s approval for raising $500 million more in the overseas markets through a diversified portfolio of instruments such as floating power bonds, looking at the ADR/GDR route or lines of credit with international financial institutions such as ADB.

“The company’s first tranche of borrowings this year is already in an advanced stage. PFC would launch a roadshow next week in the US to raise $300 million through private placement. It would also seek approval to raise resources through Euro bonds. Another $200 million is proposed to be raised through syndicated loans. The entire borrowings programme would be launched in two months,” the official said.

Funds worth Rs 12,500 crore are expected to be raised by PFC in the domestic market this fiscal. Apart from bonds, it would raise medium-term loans worth Rs 3,500 crore from institutions.

Read more in The Economic Times article.