Monnet Power Co Ltd

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In June 2007, Monnet Ispat & Energy Ltd (MIEL) entered into a Memorandum of Understanding (MoU) with Government of Orissa (GoO), to set up a 600 MW coal based thermal power plant. In February 2008, it was indicated that the project was to be implemented by the SPV in two stages over a period of 36 months. The capacity was subsequently enhanced from 600MW (2x300MW) to 1,050 MW (3x335MW) with the objective of making it a “mega” power project. The first unit would be commissioned in 33 months from June 2007 and the second unit would come on stream in 36 months. Grid Corporation of Orissa (GRIDCO), would purchase 25% of energy generated from the Project at 80% Plant Load Factor (PLF). MIEL also entered into a MoU with PTC India Ltd, the state-owned power trading company, for the sale of power at a gross capacity of 40% of the energy generated from the project. The balance of 35% was proposed to be sold on a merchant basis. Monnet Power Company Limited (MPCL), a special purpose vehicle, was established to implement the project. Initially MPCL was a 100% subsidiary of Monnet Ispat and Energy Ltd. but Blackstone Group acquired a 12.5% stake in Monnet Power Company Ltd in June 2010. The consortium bagged the tender on a negotiated basis. The maximum expected cost of generation from the project was competitive atRs2.09 per unit for the entire period of operations. The project was expected to cost approximately Rs50 billion (US$1,093 million). The project achieved financial closure August 2010 with the signing of a loan agreement of INR 38 billion (US$831 million) with the consortium of lenders led by Infrastructure Development Finance Company (IDFC). The debt/equity ratio was 76/24. In July 2010, MPCL raised INRs. 2750 million by giving 12.5% stake to Blackstone group. Construction started on October 2008 and commissioning was expected in the second half of 2012.