Essar Power Gujarat Limited (Jamnagar Power Plant)

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In January 2007, the Gujarat Urja Vidyut Nigam (GUVN), the holding of Gujarat state's electricity companies,signed a MoU with a consortium formed by India’s Essar Construction Limited and Global distribution FZE for development of a 1200 MW coal-fired thermal power plant in the state of Gujarat under a 25 year contract. The facility was a 2x600MW coal-based power plant at Salaya in the Jamnagar district of Gujarat The Gujarat plant was designed to use high quality imported coal from Indonesia and South Africa as fuel. The project would utilize around 700 acres of land near Khambalia in Jamnagar district. The consortium established Essar Power Gujarat Ltd. (EPGL), a special purpose vehicle, to implement the project. The consortium was granted the project through MOU route on a negotiated basis. Gujarat Urja Vidut Nigam (GUVN) entered into a 25-year power purchase agreement with the EPHL's Essar Power Gujarat (EPGL) for supplying 1000 MW of power at US 5.6 cents per kwh. Global FZE and Essar Constructions were the EPC contractors. Global FZE and Essar Shipping and Logistics were the equipment suppliers. The project cost was estimated to beapproximately USD 1129 million. EPGL financed this project through an equity contribution of USD 291 million and a loan of USD 838 million. In June 2008, Essar Power Gujarat Limited appointed ICICI and SBI Capital to arrange financing for this plant. In September 2008, SBI Cap arranged the domestic debt facility while ICICI arranged for the foreign currency debt. In September 2008, SBI Capital provided the loan to finance the project whereas in November 2008 ICICI completed the syndication for the loan. Construction started on July 2007 and commissioning was expected on May 2011.

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