Adani Power Rajasthan Limited

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In February 2010, the Rajasthan Government signed a MoU with Adani Group for development of a 1320 MW (2 units of 660MW each) coal-fired supercritical thermal power plant at village Kawai, in Baran District in Rajasthan. Adani Power Limited (a Adani Group company), through its 100% subsdiary - Adani Power Rajasthan Limited (APRL) would execute this project. The project had already been allotted 578.53 hectares of Government land. APRL had received all major clearances like environment clearance, water linkages etc. The State Government would assist in the procurement of coal linkage for the project. As per MoU with the Government of Rajasthan, RVPN (Rajasthan DISCOM, the procurers) shall identify and develop and adequate transmission system for the evacuation of power for the project, however APRL was free to consider laying dedicated transmission lines for the project. The primary fuel for the project was domestic coal. The total requirement of coal for the project was estimated at 5.24 million tonnes. APRL planned to procure coal from South Eastern Coalfields Ltd, and had applied to the Ministry of Coal for domestic linkage of coal, for which the letter of assurance was awaited as on January 2012. The boiler-turbine-generator contract had been awarded to Shanghai Electric Group Company Ltd, China.The BoP had also been awarded. The power generated from the project of 1320MW was primarily expected to be sold to state owned utility company. As per the Power Purchase Agreement (PPA) signed with Government of Rajasthan, APRL would sell 1200MW of the power generated from the project to Jaipur Vidyut Vitran Nigam Limited (456 MW), Ajmer Vidyut Vitran Nigam Limited (372 MW), and Jodhpur Vidyut Vitran Nigam Limited (372 MW), through a 25 year PPA, at a rate approved by the Rajasthan Electricity Regulatory Commission (RERC). Tariff would be determined on a two–part basis comprising Fixed Charge (Capacity Charge) and Variable Charges (Energy Charges) and shall be computed for each Tariff Period. The Tariff (Fixed Charge, Variable Charges) and Incentive shall be determined by the RERC. The tariff was also structured to provide for escalation in the fuel transportation charges and part of the energy charges (as per CERC escalation indices from time to time). Under the terms of the PPA, the procurers were responsible for the provision of transmission infrastructure and the associated transmission and interface costs. The residual power, excluding auxiliary consumption, could be sold to any 3rd party. The cost of the Project (1320MW) was estimated to be approximately USD 1495.7mn (INR 70300mn @47 INR/USD). Financial close took place on 26th July 2011 at a Debt/Equity ratio of 80/20. APL financed this project through an equity contribution of USD 299.1mn (INR 14060mn) and a debt of USD 1196.6mn (INR 56240mn). In addition, there was also a 3-year Letter of Credit facility of USD 1121.9mn (INR 52730mn). The INR 56240mn term loan had a door-to-door maturity of 15 years. The repayment was in quarterly instalments. The loan was arranged by SBI Capital and the participating banks were State Bank of India(34090mn), Federal Bank(2000mn), Indian Overseas Bank(3500mn), Punjab & Sind Bank(2000mn), Syndicate Bank (3000mn), Vijaya Bank(2000mn), Bank of India(5650mn), Life Insurance Corp of India(3000mn), Andhra Bank(1000mn).The 3-year INR 52730mn L/C facility was also arranged by SBI Capital. The construction for the project started in March 2011 and was expected to be progressively commissioned by April 2013 (1st unit) and August 2013 (2nd unit).