RKM Powergen Private Limited

active

In January 2009, the 350MW Phase-I of the coal power plant developed by RKM Powergen under a BOO format, reached financial closure. The project was located at Uchipinda in Dabur Taluk in Jangir - Champa district of Chattisgarh. The 1430MW project was to be executed in 2 phases (Phase 1 of 350 MW (1 x 350) and Phase 2 of 1080 MW (3 x 360)). The primary fuel was domestic coal. A consortium of Chennai based R.K. Powergen Group (74%) and the Malaysia based Mudajaya Group (26%) established RKM Powergen Private Limited, a special purpose vehicle, to implement the project. The company was granted the project through MOU route on a negotiated basis. RKM Powergen had entered into a 20-year PPA with Chattisgarh State Electricity Board (CSEB) for the sale of 30% of the net power generated by the project; the tariff had a two-part structure and was to be determined in accordance with the guidelines framed by the Chhattisgarh State Electricity Regulatory Commission from time to time. The PPA with CSEB also provided for the sale of an additional 7.5% of the net generated power at variable cost of generation. RKM Powergen had also signed a 12-year PPA with PTC for the sale of up to 700 MW (net) at a guaranteed price of INR 3 per kWh. Any failure by PTC to offtake power would necessitate payment of the guaranteed minimum charges. RKM Powergen also had the right of third-party sale in such an event where the proceeds from such third party sale would be set off against PTC’s liability to pay the guaranteed minimum charges. For the balance power available, RKM Powergen was exploring various alternatives including sale through competitive case 1 bidding and/or merchant basis. The estimated project cost was US $1374.3 mn (INR 66530 million at 48.41 INR/USD) to be funded by debt of US $1046.3 mn (INR 50650 million) and equity of US $328.2 mn (INR 15890 million). Phase-I was estimated to cost US $330.5mn (INR 16000 million). Financial closure had been achieved for Phase 1 in January 2009 and the debt requirement of US $245.8mn (INR 11900 million) had been fully tied up. US $84.7mn (INR 4100 million) had been contributed till date as equity for Phase-I. RKM Powergen was in advanced stages of tying up the debt requirements for Phase 2 (US $800.4mn or INR 38750 million at 48.41 INR/USD). Unit 1 of the power plant was scheduled to be commissioned by June 2011, with the other 3 units following with a 3 month gap for each unit. The land requirement for the project was 900 acres of which 739 acres had been acquired till date. Water requirement was to be be sourced from Mahanadi river. Coal linkage was for 350MW and coal from captive coal block (Fatehpur East of SECL) was for 1000MW. As against a total requirement of approx 7.9 million MT per annum, RKM Powergen had obtained coal linkages from South Eastern Coalfields Limited (SECL) to the extent of 6.24 million MT per annum. Shortfall, if any was expected to be met through spot market purchases in the domestic market and/or imports. Most of the major approvals and power transmission agreement with PGCIL were in place.