LANCO Kondapalli Power Private Limited (Phase-III)

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LANCO Kondapalli Power Private Limited was an Independent Power Project (IPP) located at Kondapalli Industrial Development Area near Vijayawada in the state of Andhra Pradesh. This Combined Cycle gas based Power Project was being developed by the Lanco group of India, in three phases.Phase-I of 368MW had been operational since October 2000; Phase-II of 366MW had been operational since December 2009. Phase-III consisting of 2units of 371MW each was currently under implementation. Natural gas for the plant was expected to be sourced from GAIL India Limited and Reliance KG basin based on long term contracts. As a backup arrangement, the company had created Naphtha Storage and handling facility for dual fuel operation of the Phase-III plant. Water was being sourced from upstream of the Prakasam Barrage on the River Krishna in Andhra Pradesh.All statutory clearances for Phase-III were in place. Lanco established, Lanco Kondapalli Power Private Limited, a special purpose vehicle, to execute this project. While 368MW from Phase-I was being sold under a 15 year PPA with Transmission Corporation of Andhra Pradesh Limited (APTRANSCO), and 366MW from Phase-II was being sold to PGCIL on merchant basis; Phase-III power of 742MW was being partly sold through a PPA, and negotiations for the rest were under progress. Details of these PPA (pricing as well as customers) for Phase-III were not known at the time of collection of this information. EPC was being undertaken by Lanco Infratech Limited. The project cost was estimated to be approximately USD 580mn (INR 26100mn @45 INR/USD). Financial close took place on 10th January 2011 at a Debt/Equity ratio of 70/30. Lanco financed this project through an equity contribution of USD 174 million (INR 7830 @47 INR/USD) and a 14-year term loan of USD 406 million (INR 18270mn @45 INR/USD). The debt was arranged by sole book-runner and mandated lead arranger- Axis bank. Axis committed INR 3770mn and other participating lenders were IDFC (INR 6000mn), Canara Bank (INR 2000mn),Andhra Bank (INR 3000mn), Life Insurance Corp of India (INR 3000mn), Bank of Baroda (INR 500mn). The construction started in July 2010 and by March 2011, 36% of the EPC work had been completed. The project was expected to be completed by July 2013. Expected completion time of the Phase-III was 18 and 24 months for Open Cycle and Combined Cycle respectively.