Dheeru Powergen Limited (Chattisgarh)

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In October 2004, the Government of Chattisgarh, signed a MoU with Dheeru Powergen Private Limited (DPPL), a SPV of Ranhill Berhad of Malaysia, for development of 600 MW (2x300) coal fired sub-critical thermal power project in Dhanras village in Korba District of Chhattisgarh State. In October 2009, DPPL revised the capacity of this project from 600MW to 1050MW (3 Units of 350MW).The total land required by the project was about 938 acres and the acquisition was expected to completed by June 2011.The water requirement would be met from Hasdeo river. Environmental clearance including consent to establish had been obtained.DPPL had signed a long term open access agreement with Power Grid Corporation of India Limited in January 2009, under which DPPL would receive open access for up to 1050MW (600MW had already been granted to PTC India in 2006) and power would be evacuated using a 400 KV transmission line to the Sipat Pooling station.The EPC was being undertaken by Ranhill Engineers and Constructors, Malaysia. In February 2010, IDFC Projects acquired a majority stake of 51 per cent. in Dheeru Powergen Private Limited (“DPPL”).The Company was converted into a public limited company vide the Special Resolution passed by the Members in the Extra Ordinary General Meeting of the Company held on July 21, 2010. Consequently the name of the Company was changed from “Dheeru Powergen Private Limited” to “Dheeru Powergen Limited” by deletion of the word “Private”.At the time of collection of this information, IDFC had a 74% stake in the project, with original sponsor, Malaysian construction group Ranhill Berhad owing the remaining 26%.IDFC was in talks for selling its equity stake in DPPL, and various developers like GVK, Lanco Infratech and GMR Infrastructure had reportedly shown interest. The primary fuel for the project was domestic coal.LOA from South Easter Coalfields Limited (SECL) for 4.71MT per annum had been obtained which was expected to take care of the Unit-I of the 350MW.The SECL pithead was located 30kms from the power plant. The landed cost of this Grade-F coal was INR 950 per tonne. DPPL had requested MoC to allocate coal linkage for balance 700 MW capacity. Mahanadi Coalfields Limited (MCL) was also expected to supply coal for this project. The power generated from the project of 660MW was expected to be sold to entities including state electricity boards, state owned utility companies, power trading companies. In September 2006, DPPL had signed a power purchase agreement with Power Trading Corporation for 600 mw, or 57% of the maximum generation. PTC in turn was expected to sell 300MW each to Madhya Pradesh and Punjab utilities. The Chhattisgarh State Electricity Board would get 5% power at energy charges. The utility also had a right of first refusal on an additional 30% (about 367MW) at Central Electricity Regulatory Commission-set tariff. The balance power 82.5MW could be sold on merchant basis. The cost of the Project was estimated to be approximately USD 1283.5 million (INR 57760mn @45 INR/USD). Financial close took place on 1st January 2011 (although DPPL appointed SBI Capitals as arranger in May 2006), at a Debt/Equity ratio of about 75/25.DPPL financed this project through an equity contribution of USD 320.9mn (INR 14440mn @45 INR/USD) and a debt of USD 962.7 million (INR 43320mn @45 INR/USD).The debt, arranged by SBI Capital and IDFC, had a tenor between 14 and 15 years. The construction for the project started in May 2011 and was expected to be progressively commissioned by February 2015.