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According to people connected with the fund tie-up, a consortium of banks and financial institutions led by State Bank of India (SBI) has agreed to lend the debt component of the proposed Rs 4,800-crore project.
Other consortium members include IIFCL, ICICI Bank, Punjab National Bank, Allahabad Bank and United Bank of India. "ICICI Bank will lend around Rs 1,000 crore, while SBI will extend around Rs 700 crore," a banking industry executive said. When contacted, an Essar Power spokesperson declined to comment on the issue.
With this current transaction, Essar Power has arranged a total debt of Rs 7,200 crore in the past two months. In July, it achieved financial closure for a similar capacity power project at Mahan in Madhya Pradesh.
The Ruias are planning to invest Rs 20,000 crore to scale up the power generation capacity to 6,000 mw in three years. The entire project funding is in a debt-equity ratio of 3:1 and the company will bring in around Rs 5,000 crore as equity component, said a company executive.
Essar Power has been working on four projects for the past two years, negotiating with equipment suppliers and recruiting people for these projects.
Besides Salaya, the projects include a 1,200-mw pithead coal-fired Mahan thermal power plant at Sidhi in MP, a 1,200-mw imported coal-based unit, a 900-mw gas and liquid fuel power plant at Jamnagar in Gujarat and another 1,200-mw pithead coal-based power plant at Tori in Jharkhand.
Essar has also signed a boiler-turbine-generator agreement with China's Harbin and Siemens and has also finalised EPC contracts for most of the power plants. These power projects have either captive coal linkages where the group owns mines or is located near the ports with source of imported coal.
For example, the coal-fired power project at Salaya in Jamnagar, with two units of 600 mw each, will use imported coal. The total coal requirement, about four million tonne, is also tied up. Also, at the same place, a port with an annual handling capacity of 16 MTPA is being set up.
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