Maithon Power completes thermal power project

Tata Power Company Ltd (Tata Power) has informed that the Maithon Power Ltd (MPL), a 74:26 joint venture between Tata Power and Damodar Valley Corporation (DVC) announced completion of its financing for the 1050 MW coal based thermal power project, being set up in Dhanbad District of Jharkhand State. The Project estimated at a cost of Rs 4,450 Crores is being funded on a debt-equity ratio of 70:30. The promoters namely Tata Power and DVC would bring in equity in a ratio of 74% and 26% respectively. The debt for the project is Rs 3115 Crores and is being financed by various banks led by State Bank of India (SBI).

SBI Capital Markets Ltd (SBICAP) is the sole financial advisor and arranger of debt for the project. The syndication was over subscribed by nearly Rs 1050 Crores with The State Bank of India Group taking the largest exposure to the tune of Rs 1000 Crores. The consortium of 17 Banks, led by State Bank of India include Allahabad Bank, Bank of Baroda, Canara Bank, Central Bank, Dena Bank, Indian Overseas Bank, J&K Bank, Oriental Bank of Commerce, Punjab & Sind Bank, Tamilnadu Mercantile Bank, UCO bank and more.

Taking cognizance of the huge power deficit in the country, the promoters namely Tata Power and DVC have infused equity in excess of the upfront equity requirement as stipulated by the lenders. The promoters have allocated the funds prior to the financial closure to ensure the project is commissioned in time.

Speaking on the occasion, Mr. Prasad R Menon, Managing Director, Tata Power said, "The closure of financing for Maithon project is an important milestone. The attractive financing demonstrates the faith of the tenders in the promoters, their execution capabilities and expertise to complete the project in time. The unique terms of debt financing provides us more flexibility in the execution of the project as well as help in controlling costs."

MPL is a Joint venture Company between Tata Power and Damodar Valley Corporation and is executing 1050 (2 x 525) MW Maithon Right Bank Thermal Power Plant. MPL has obtained all major clearances & permits for the project. The site preparatory works are in progress and orders for main equipments have been placed. The project will comprise of two generating units of which the first unit of 525 MW is expected to be commissioned by October 2010, which is in time to meet the 2010 Delhi Commonwealth Games requirements. The second unit will be commissioned by March 2011. The long-term coal linkage has been allotted from the nearby Bharat Coking Coal Ltd (BCCL) mines and water allocation is from the adjacent Maithon reservoir.

MPL has also signed Power Purchase Agreements with DVC for 300 MW and is the lowest bidder for 309 MW power requirements for Distribution Licensees of Delhi. The Company has obtained open access from Power Grid Corporation of India to transmit power through their infrastructure to the power deficit Northern States.