Krishnapatnam Ultra Mega power plant

Active

Coastal Andhra Power Ltd was the SPV created to build and operate 4000 MW Krishnapatnam Ultra Mega power plant at Krishnapatnam in Andhra Pradesh to provide electricity to four states (Andhra Pradesh (1,600 MW), Maharashtra (800 MW), Tamilnadu (800 MW), and Karnataka (800 MW). Coastal Andhra Power Ltd was a subsidiary of Reliance Power, which won the project under a competitive tender by offering the lowest levelised tariff. Coastal Andhra Power Ltd was transferred to Reliance Power under the provisions of a share purchase agreement dated January 29, 2008 after Reliance Power won the International Competitive Bidding (ICB) conducted for the project. In July 2006 Power Finance Corporation (PFC), the nodal agency responsible for bidding for UMPPs, issue the documents for request for qualification (RFQ) and set submission deadline on 30 Sep 2006. Issuance of request for proposal (RFP) documents was followed on 10 Nov 2006; responses of RFP were due on 9 Mar 2007. In November 2007, PFC awarded the project to Reliance Power which offered at a levelised tariff of Rs 2.33 per unit as against Rs 2.68 of L&T and Rs 4.19 of Sterlite Industries. While L&T had submitted bids for putting up four units of 1,000 mw each (4x1,000 mw), Sterlite has proposed 6x660 mw and Reliance 5x800 mw configurations. Due to high coal prices, the tender of Krishnapatnam project received a bleak response and as against nine pre-qualified bidders, financial bids were received from only three companies—Sterlite, L&T and Reliance Power. Those who stayed out of the bidding for Krishnapatnam included Japan’s Sumitomo Corporation, GMR-China Light and Power combine and DS Construction with Israel Electric Company, Tata Power, Essar Power and NTPC. The coal requirement for the project was estimated to be 14 million tonnes per annum at 80 per cent plant load factor. The project cost was estimated to be INRs 175000 billion (US$ 3,826 million). The project reached financial closure in July 2010. The debt equity ratio for the project was 75/25. Financing comprised Rs99bn 15-year term loan in debt and Rs29.51bn in equity. The debt was arranged by IDBI. Syndication launched on 2 Mar 2010 and loan agreement was signed on 7 Jul 2010. The Project was planned by the Government of India as one of the ultra mega power projects (UMPPs). The Government of India has envisaged "Power for All" by 2012. In order to achieve this, the Ministry of Power launched an initiative for facilitating the development of coal-based UMPPs in India. Development of such large-sized power projects can result in lower cost of generation through economies of scale. Based on supercritical boiler technology, the UMPPs are also expected to be more environment friendly than conventional sub-critical power generating units, which remain the operating norm in India. As of Feb 2009, around thirteen Ultra Mega Power Projects (UMPPs) have been planned in India. They are Tadri, Karnataka; Akaltara, Chattisgarh; Sasan, Madhya Pradesh; Krishnapatnam, Andhra Pradesh; two at Girye, Maharashtra; two at Lankahuda (Sundergarh district), Orissa; two at Cheyyur, Tamil Nadu; Mundra, Gujarat; and Tilaiya, Jharkhand.