Alaknanda Hydro Power Co Ltd

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Alaknanda Hydro Power Co Ltd was set up to develop and operate a 330 MW Hydropower Project in the State of Uttaranchal. The project, also known as Shrinagar Hydro Electric Project, involved a 4x82.5 MW run of the river hydroelectric power plant in India. The project is located on the Alaknanda River, a major tributary of the Ganga River, a perennial river in Uttarakhand. Alakananda Hydro Power Company Limited (AHPCL) was originally incorporated in 1996 as Duncans North Hydro Power Company Ltd. (DNHPCL) and was renamed as Alakananda Hydro Power Company Limited in the year 2003, when Tata Power took over the project from the joint venture of Duncans and Synergics hydro Asia. However, in the year 2005, the GVK group took over the project through one of its group company, Bowstring Projects & Investment Private Ltd, which was later merged with GVK Power and Infrastructure ltd (GVKPIL) Alaknanda Hydro Power Co Ltd was a subsidiary of GVK. The E&M contract was awarded to BHEL, The project company signed a power purchase agreement with the Uttar Pradesh Power Corporation Limited. Power generated at Shrinagar project would be purchased by UP Power Corporation Ltd (UPPCL) at power station bus bar. As per the PPA signed between UPPCL & AHPCL, 88% of the generated power will be made available at 400 kV bus bar of the Power Station for sale to UPPCL, with UPPCL being responsible for making the necessary transmission infrastructure for evacuating the power from the project. The state of Uttarakhand will be provided 12% of the power generated as free energy. As per the PPA signed between UPPCL & AHPCL, UPPCL was required to establish an Escrow Agreement as a collateral arrangement towards payment to AHPCL. UPPCL agreed to deposit the revenues from 'Specified Distribution Sections' (SDS) in the escrow account, so that the balance in the Escrow Account shall not be less than an amount equal to 1.25 times of the monthly payment, due from UPPCL to AHPCL. The invoice will be raised at the end of the month and UPPCL will get a rebate of 2%, if the payment is done within seven days. Though the main payment mechanism will continue to be irrevocable Letter of Credit, in case there is devolvement of LC, AHPCL would have first ranking lien on the funds in the Escrow Account. The project cost was estimated at Rs20.690 billion (US$ 500 million). The project achieved financial closure on 3rd August, 2007 with a debt/equity ratio of 80/20. The US$400 million loan was provided by Punjab National Bank as the Lead Bank, while Axis Bank Ltd (erstwhile UTI Bank Limited) was the Security Trustee and IDBI Bank Ltd. was the Trust and Retention Account bank. On 27th February 2013, AHPCL availed additional funds of US$ 347.1mn (INR 20340mn @58.6 INR/USD) to cater to additional cost for project overruns.Financing comprised a 19-year 7-months term loan of US$ 203.9mn (INR 11950mn) and sponsor equity of US$ 143.2mn (INR 8390mn). The term loan had a grace period of 6-months and repayment schedule of 53 quarterly installment. Lenders were Punjab National Bank, Central Bank of India, Power Finance Corp and REC. Punjab National Bank was the lead arranger. Construction was expected to be completed in July 2011.The project was commissioned in March 2014.