The Hindu Business Line : ADB keen to fund ultra mega power projects

The details
The Ministry of Power is looking to finalise the award process for the first projects off the blocks by the end of December.
Power Finance Corporation is in talks with a number of domestic and foreign financial institutions for tying up funds.

New Delhi , Sept. 10

The Manila-based Asian Development Bank (ADB) has evinced interest in providing assistance for the Government's ultra mega power projects being developed through competitive tariff-based bidding.

The Centre is also in talks with other multilateral agencies, including the World Bank's private sector lending arm — the International Finance Corporation — for possible financing for each of the seven 4000 MW projects, which would entail an investment of over Rs 16,000 crore (about $3.5 billion) per project, with the debt component expected to be around 70 per cent of the total project cost.

"We are in talks with multilateral agencies in view of the enormity of fund requirement for each of the projects... ADB has already expressed interest in providing assistance to the projects. Once the successful bidder is identified as the project developer, it would be left to the selected developer or consortium to negotiate further with ADB and other financing agencies for availing themselves of the financial instruments being offered by them, which could include debt, equity and guarantees," a Government official involved in the exercise said. The exact modality of such multilateral funding is still being worked out since the Union Government generally stands guarantee to any loan coming in from such agencies.

The Ministry of Power is looking to finalise the award process for the first projects off the blocks — coal-fired ultra mega power plants in Sasan in Madhya Pradesh and Mundra in Gujarat — by the end of December. Power Finance Corporation, acting as a nodal agency for conducting the bidding process for these projects, is in talks with a number of domestic and foreign financial institutions for tying up funds.

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