Tata Power announces financial closure of Mundra project

Tata Power (TPC) has announced the financial closure of its 4,000 MW ultra mega power project (UMPP) at Mundra in Gujarat. The financial agreements have been signed under the company’s special purpose vehicle (SPV), Coastal Gujarat Power Ltd (CGPL).

The project cost is estimated at Rs 17,000 crore. The project is financed through equity of Rs 4,250 crore, external commercial borrowings (ECB) of around $1.8 billion (about Rs 7,200 crore) and rupee loans of up to Rs 5,550 crore. SBI Caps are the financial advisors and mandated lead arranger for rupee loans.

The first of the five units is expected to be commissioned by September 2011 and the entire plant is expected to be commissioned by end-2012. The project consists of 5 units, each of 800 MW which will generate saleable power of 3800 MW to be supplied to five states namely Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.

The signing of the financing agreements for Mundra UMPP is an important milestone. The terms of debt financing provides TPC a long tenure of loans, supporting its competitive bid price assumptions. The good response demonstrates the faith of the lenders in its execution capabilities and expertise to complete the project in time.