Project to achieve financial closure in April
Monday, 20 April 2009
SBI is the lead banker for the project and has committed Rs 3,200 crore.
The Rs 19,400 crore Sasan Ultra Mega Power Project will finally achieve financial closure this month. While Reliance Power has already tied up over Rs 12,000 crore of debt for the project, the balance will be tied up soon. The financial closure of Reliance Power's much talked about and much delayed, Sasan Ultra Mega Power Project, will finally happen in April.

It that the process will be completed in the next two weeks. The project will have a debt to equity ratio of 3:1. Of the total required debt of Rs 14,550 crore, Sasan UMPP has received commitments from nearly a dozen banks and financial institution as for Rs 12,110 crore. It expects the remaining funds to be tied up soon.

Satnam Singh, CMD, Power Finance Corporation, said, "According to our information, the gap is very minimal and it is likely to take place in this month." The financial closure for this project should have been achieved by October 2008.

SBI is the lead banker for the project and has committed Rs 3,200 crore. The other major lenders are IIFC UK which has lent USD 440 million and IIFC India Rs 400 crore. Both will commit over Rs 2,500 crore. PFC has also confirmed to provide Rs 1,770 crore to the project.

ICICI Bank, Punjab National Bank, Bank of India, and IDBI Bank may also be roped in. After the financial closure, Reliance Power is likely to have an excess of Rs 1,700 crore.

So, while the economic slowdown and credit crunch may have delayed the financial closure for Sasan, the project has already begun ground work on the back of initial financing that it received from SBI.