Lanco's Nagarjuna Power achieves financial closure

Mumbai, Oct 17 (UNI) Lanco Group promoted 1,015 megawatt Nagarjuna Power Project at Mangalore in Karnataka has achieved financial closure.

The coal-fired thermal project, which will be set up at a cost of Rs 4,342 crore, has jointly been funded through a mix of debt and equity. A consortium of 14 banks and financial institutions, led by Power Finance Corporation, has financed the project loan of Rs 3,474 crore, the release said.

Other lenders to the project included Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank, Dena Bank, Indian Bank, Indian Overseas Bank, IDBI, IIFCL, Oriental Bank of Commerce, Punjab National Bank, Syndicate Bank and Union Bank of India. The loan book was over-subscribed.

Of the equity component, Lanco will have a 74 per cent stake with the balance held by Nagarjuna. The project, which would be using 100 per cent imported coal, is the first Independent Power Project in the country to be awarded a ''mega project'' status. It is also the first independent power project in the country to operate on imported coal.

The project has obtained all clearances/approvals from various departments of both the Centre and the Karnataka government and is being fully supported by the governments.

While 90 per cent of the power will be supplied to Karnataka, the balance 10 per cent will be supplied to Punjab for which necessary power purchase agreements (PPA) have been entered with the five Escoms/Discoms of Karnataka and Punjab State Electricity Boards respectively, the statement added.

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