Vidarbha Industries Power Limited

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In Oct 2004, Maharashtra government called for final bids from Tata Power, Reliance Energy, Wartsila, L&T and BHEL to set up a group captive power plant (GCPP) and Reliance Energy was selected as the implementing agency for setting up a coal based 600 MW GCPP at Butibori, Nagpur. The power project is be set up at the Maharashtra Industrial Development Corp (MIDC) Butibori Industrial Area. Power generated will be distributed to Butibori, Hingna and other industrial users in the area. It is the first plant under the "group captive power project" scheme, launched by the state government and the scope of the project includes a power plant, a transmission unit and a 19km railway track for supply of coal from Western Coalfields. The land was under possession, coal linkage was expected from Western Coalfields Ltd and Water was allocated by the MIDC. All statutory clearances required for the project were in place. Reliance was selected as the implementing agency for setting up the project through a competitive bidding process. The bid parameter was the lowest tariff quoted. Vidarbha Industries Power Limited (VIPL) was incorporated on December 27, 2005, as a special purpose vehicle of Reliance Energy Limited to implement the Butibori Thermal Power project. This company became a subsidiary of Reliance Power on August 30, 2007. Unit 1 (300 MW) was designed on a Group Captive Project basis and hence 51% of the capacity will be supplied to industrial consumers (In accordance with a notification issued by the Ministry of Power for captive power plants, at least 26% of the equity and at least 51% of the power must be sold to captive users). Unit 2 (300MW was designed as Independent Power Project (IPP). The plant was situated in the midst of industrial area and will supply over 150 MW to industries thus ensuring perpetual demand for the power generated from the plant. The balance capacity is expected to be sold on a merchant power basis to the power deficit Western region. It has already signed a Power Purchase Agreements (PPA) for 133 MW with Reliance Energy Trading Limited (RETL) at a base price of INR 4.80/unit. The evacuation of the power from the project would be through the transmission networks of Maharashtra State Electricity Transmission Company. The Engineering, Procurement and Construction (EPC) contract was awarded to Reliance Infrastructure Ltd. and the Boiler Turbine Generator (BTG) contract was awarded to Shanghai Electric Co. The project cost for Phase-I (300 MW ) was estimated to be approximately USD 427.6 mn (INR 20700 million @ 48.41 INR/USD). Phase-I (300MW) of the project achieved financial closure in July 2009 with a debt/equity ratio of 80/20. Financing comprised a 15-year term loan of USD 342.1 mn (INR 16560 mn) and sponsor equity of USD 85.5mn (INR 4140 mn). The term loan facility was syndicated by Axis Bank with State Bank of India, Union Bank of India, United Bank of India, South Indian Bank, Syndicate Bank, UCO Bank, Allahabad Bank, Dena Bank, Life Insurance Corporation of India, Corporation Bank, Karur Vysya Bank and, State Bank of Hyderabad. The project cost for Phase-II (300 MW ) was estimated to be approximately USD 315.8 mn (INR 16878 million @ 53.44 INR/USD). Phase-II (300MW) of the project achieved financial closure in May 2012 with a debt/equity ratio of 71/29. Financing comprised a 12-year term loan of USD 73.3mn (INR 3919.5mn), a dollar denominated 8-year term loan of US$150mn (INR 8016mn), and sponsor equity of USD 92.5mn (INR 4942.5mn). The term loan facility was syndicated by Axis Bank with Allahabad Bank,Corporation Bank, Dena Bank,Karur Vysya Bank,Life Insurance Corp of India,PTC India Financial Services,State Bank of Hyderabad, State Bank of India, State Bank of Travancore, South Indian Bank, Syndicate Bank, UCO Bank,Union Bank of India,United Bank of India,Yes Bank. Phase-I (300MW) of the project was commissioned in June 2012 and the Phase-II of the p Phase I operational on June 2012, Phase-II in Jan 2013. Project description changed to incorporate additional information. Phase-II financing details included. closure on May 2012.