SBI commit Rs 75,000 Crs loan for 15,000 MW of Renewable Energy Projects

 

State Bank of India (SBI) committed Rs 75,000 Crs for the 15,000 MW capacity of Renewable Energy Projects to be executed in next 5 years.

Current exposure of SBI is Rs 1,78,000 Crs in the power sector including conventional energy projects as well as Distribution Utilities.

However, SBI has denied any concessional rate of interest for the Renewable Energy Projects as per the current norms. According to it the rate be reduced provided RBI classifies the renewable energy in the priority sector lending category which would provide incentives to banks for lending to this segment.

As per RBI norms, banks have to necessarily lend 40 per cent of the total loans towards priority sector category.

 

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Dubai-based group secures Rs. 1,600-crore funding for Tamil Nadu power plant...

 

Dubai-based Coal & Oil Group has received Rs. 1,600 crore in additional funding for its 1,200-MW project in Tuticorin, Tamil Nadu.

"Coal & Oil Group has announced that it has secured additional funding of approximately Rs. 1,600 crore to complete its 1,200 MW Independent Power Plant (IPP), presently under construction in Tuticorin, Tamil Nadu," the company said in a statement on Monday.

The Mutiara Thermal Power Plant aims to partly address the 5,000 MW power shortage in the state.

The plant will be developed by Coastal Energen Private Ltd, the power generating Flagship Company of the Coal & Oil Group.

It is also the region's second-largest private investor, with capital expenditure exceeding Rs. 6,800 crore, the statement said.

The IPP will benefit from close proximity to both a major city (Tuticorin) and major port, as well as excellent road, rail and air connectivity, it added.

"India, and particularly, the state of Tamil Nadu, is currently facing severe power shortage. Our power project will be able to partly mitigate the hardships being faced by the state. In fact, we have committed to supplying a large part of our generation to the state grid," said Ahmed Buhari, founder, president and CEO of the Coal and Oil Group.

The Mutiara power plant has obtained Rs. 5,200 crore in funding from a consortium of Indian banks led by State Bank of India (SBI).

This latest sanction will contribute to last mile funding and address cost escalation due to recent steep rupee devaluation, among other things. The power plant is slated for completion by June 2014, it further added.

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Government moves RBI to bail out lenders of Dabhol Gas based power plant...

 

Coming to the rescue of the lenders of Ratnagiri Gas and Power Projects Ltd (RGPPL), including SBI and ICICI Bank, and PSU promoters NTPC Ltd and GAIL India Ltd, which have huge exposure in the beleaguered Dabhol project, the finance ministry has asked the Reserve Bank of India (RBI) for a one-time relaxation to save the company and its Rs. 13,000-crore  assets from being classified as a non-performing asset (NPA).

“At a recent meeting chaired by finance secretary Arvind Mayaram it was directed that the department of financial services (DFS) will take up the matter for relaxation of asset classification norms to RGPPL with RBI, with a request for extended forbearance till March 31 2014 as a one-time exception, considering the circumstances and the exposure of PSUs, including PSU banks,” a senior government official told Hindustan Times.

The move would not only provide RGPC a breather, but also give some time to the lenders who would otherwise have had to show fresh slippage in their books.

RGPPL is the company promo­ted by NTPC and GAIL India’s largest gas-based power plant, the 1967 mega watt Dabhol Power project that is currently stranded due to lack of availability of domestic natural gas.

The lenders and PSU promoters of RGPPL have been sounding the alarm over Dabhol’s balance sheets. NTPC, SBI and ICICI Bank had in separate communications to the government warned that the project is on the verge of becoming an NPA, which would have a backlash on its promoters.

The company has a debt exposure of Rs. 8,500 crore, apart from equity ownership by PSU and banks.

“The viability of the plant is in question, and it was clearly pointed out in the meeting that RGPPL has not been able to repay debt to lenders from September 2013, and unless adequate affordable domestic gas is ensured and the beneficiaries commence paying corresponding fixed cost, the plant will be declared an NPA,” the official said.

The meeting also decided that the petroleum ministry would move a note seeking directions from the empowered group of ministers (EGoM), about gas allocation and implementation of priority to RGPPL along with fertiliser units as per its original decision.

Further, Mayaram will write to chief secretary of Maharashtra, indicating that the state government is required to pay outstanding dues to RGPPL for the period when power was supplied to it.

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SBI warns of Dhabol power project becoming an NPA...

 

Warning that the Ratnagiri Gas and Power Private Limited (RGPPL) 1979 MW Dhabol power project was on the verge of becoming a non-performing asset (NPA) and the public and private sector banks could stand to lose an exposure of Rs. 9000 crore, State Bank of India (SBI) chairperson, Arundhati Bhattacharya has sought government intervention to save the situation from turning grim by allocating adequate gas to RGPPL to ensure its smooth operations.

Earlier, ICICI bank had informed the government that RGPPL, popularly known as Dhabol power project was turning into a NPA due to failure of the government to allocate adequate gas.

In a letter to the Power Secretar, P.K. Sinha, the SBI chairperson has pointed out that RGPPL has not been able to service interest for August, September, and October 203 and the instalment for the quartering ending September 30 due to the lenders. “The account if on the verge of becoming an NPA if interest for August 2013 is not serviced on or before November 29,” the letter states.

Further it has pointed out that the exposure of public sector lenders, currently about Rs. 8500 crore (SBI’s share is Rs. 1752 crore), was restructured once in 2009 under the guidance of Ministry of Power due to delay in implementation of the project. The company has no funds to meet repayment commitments and the company is on the verge of default in meeting repayment commitments because of stalled operations due to non-availability of fuel. This would result in slippage of asset quality, which would be a setback for the lenders despite their sacrifice through waivers and concessions in reviving the project, it added.

Ms. Bhattacharya said as against 8.5 mmscmd of gas requirement, there has been no supply for the last four months and the supply of 0.9 mmscmd from GAIL India as and when gas is available is not sufficient to run even one out of the six gas turbines at technical minimum operating parameters. “We request you to use your good offices in ensuring adequate supply of gas for the project to enable the power plant to run without interruption to protect the interests of all the stakeholders. We request you to take up with Power Ministry and the Government of Maharashtra for payment of dues to RGPPL immediately so that the company would be able to meet its repayment commitment to the lenders in time to tide over the crisis,” the letter states.

The current plant load factor (PLF) of Dhabol project has fallen to 29 per cent much lower than 45 per cent in April and 38 per cent in May this year. For RGPPL to achieve break even and service its current debt obligations, it has to operate at a PLF of 69 per cent during 2013-14 and 79 per cent in 2014-15.

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Damodar Valley Corp switches to SBI loan to trim interest cost...

 

At a time when power companies are facing stress in managing debt, state-owned Damodar Valley Corporation has successfully swapped a Rs 2633-crore high cost existing project loan with SBI to save on interest cost.

"We have repaid the remaining project loan of Rs 2633 crore of the Power Finance Corporation with a new loan from SBI that lowers our interest cost to 10.6 per cent from 12.5 for our 1000 MW (500x2) Koderma thermal power project," DVC Director (Finance) T K Gupta.

Over the next 10 years, DVC would save a substantial amount, he said.

One unit of Koderma 500MW has been commissioned and another will be commissioned in the next few days.

Gupta said the company is aiming to swap another project loan of Rs 3,000 crore with a low cost one on similar lines.

"We will share the details once we complete the deal," he said.

DVC chairman R N Sen said in the past the company has switched to low cost loan when a thermal project is commissioned.

During project implementation period, banks normally do not prefer or lend at higher rate due to execution uncertainty risk.

When a project gets commissioned, banks agree for credit at cheaper rate as risk is minimised.

DVC registered a net profit of Rs 392 crore in 2012-13.

 

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