Jindal Orissa Thermal Power Plant

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In 2007, the Grid Corporation Limited (GRIDCO Orissa) and PTC India Ltd., the state-owned power trading company, signed a 25 year contract with India’s Jindal Group for development and construction of 1200 MW coal-based thermal power plant in the state of Orissa in India. The project involved the construction of a 1200 MW Coal-based Pit-Head Thermal Power Plant. The project site was located about 30 kms from NH-23near village Derang in the Angul district of Orissa. The project was expected to be implemented in two phases - first stage of the project will construct one unit of a 600MW; Phase-II included the addition of a similar unit of 600MW capacity at a later stage. Coal and water linkage was expected to come from the Mandakini Coal Block and Brahmani River, respectively. Construction for Phase – I started in 2008. The consortium of Jindal Photo (26%), Jindal Poly Films (14%), B.C. Jindal Group Investment companies (35%), Budhiya Marketing and Soyuz Trading (25%), established Jindal India Thermal Power Ltd.(JITPL), a special purpose vehicle, to implement the project. The consortium bagged the tender on a negotiated basis. The power off-takers would be Grid Corporation of Orissa (GRIDCO) Orissa and PTC India Ltd. GRIDCO will offtake 25% of the power generated for 25 years and PTC India will offtake 75% of the power for 15 years. The first two 600 MW of the project was expected to cost approximately INR 5940 crores (USD 1,365 million). The first unit of the project achieved its financial closure in October 2008 with a debt equity ratio of 80:20. JITPL financed this project through an equity contribution of USD 145 million and a loan of USD 537 million. In October 2008, SBI Capital arranged USD 537 million syndicated loan to finance the PHASE-I (600 MW) of the project. The loan for the project was divided into a USD 503 million rupee equivalent term loan and USD 34 million of rupee equivalent mezzanine debt.SBI Capital was the arranger and some 14 domestic banks joined as lenders. There was no information on the financial closure of the second unit, but construction was well underway by 2009. Construction of the first two units started on October 2008 and commissioning was expected on April 2012. In October 2010, the third 600 MW unit reached financial closure. The project cost was estimated at Rs31.6 billion (US$691 million). Financing comprises Rs23.7bn debt and Rs7.9bn equity. Debt is financed through a 13-year 8-month term loan. Mandated arranger is SBI Capital Markets.