Jaypee Powergrid Ltd

active

In January 2000, Govt. of India (GoI) issued detailed guidelines for private sector participation in transmission. The Guidelines envisage two routes for inviting private sector participation. One route is through a Joint Venture of PGCIL and private investor, wherein the Central Transmission Utility (CTU)/State Transmission Utility (STU) shall own at least 26% equity and the balance shall be contributed by the Joint Venture Partner (JVP). The other route called IPTC (Independent Power Transmission Corporation) is to facilitate private investors including investors coming through FDI to invest 100% by themselves. Power Grid Corporation of India Limited (PGCIL), the CTU in India and Jaiprakash Hydro-Power Limited (JHPL) formed a JV called Jaypee Powergrid Limited (JPL) in March 2006 to construct, maintain and operate the 248 km transmission system associated with evacuation of power from the 1000 MW Karcham Wangtoo Hydro Electric Project. The transmission line included a 400kV inter-state line connecting the Karcham Wangtoo hydro project to a 400/200kV substation at Abdullapur in the district of Yamuna Nagar. The line was to supply power to Himachal Pradesh, Haryana, Punjab, Uttar Pradesh and Rajasthan. JPL signed a contract with Jaiprakash Karcham Hyrdo Corporation Limited – JKHCL, which was implementing the 1000 MW hydro power plant. JHPL holds 74% equity in the JV while PGCIL holds 26% equity. JHPL will hold 51% equity in JPL, while Jaipraksh group will hold 23% and PGCIL the remaining 26%. The project was to generate revenues through transmission charges from JKHCL, based on the federal regulator’s norms for transmission projects. Once operational, transmission projects generate stable cash flows with fewer operational risks, as the projects are generally a single source for the evacuation of power and benefit from reasonable and transparent tariff policies. Project cost was estimated to be $234 million (Rs10bn). Financial close was achieved on 31 Mar 2008. Financing comprised a Rs7bn 16-year term loan and Rs3bn equity. ICICI was the sole mandated lead arranger. Syndication signing took place on 17 Jun 2008. The project is estimated to be completed by FYE11. Commissioning is slated for 2011.