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NPCIL-Nalco Power Company Limited — a joint venture between Nalco and NPCIL (Nuclear Power Corporation of India Ltd) to set up nuclear plants —will raise a term loan of up to Rs 1,500 crore over the next three months to fund the construction of power generation capacities.
The joint venture’s board met in Mumbai last week to take stock of the progress of the plant’s construction. B L Bagra, director (finance), Nalco said, “Initially, we are looking for Rs 1,000 to Rs 1,500 crore funding from various banks. We are in talks with the banks and hope to complete the process in the next two-three months.”
According to the joint venture agreement, Nalco currently holds 26 per cent stake in the company with an option of taking it up to 49 per cent. The rest is with NPCIL.
The total project size is Rs 11,500 crore with the total debt requirement at Rs 7,000 crore.
The joint venture is exploring other options such as a bond issue or external commercial borrowings (ECBs) as well.
The companies are yet to decide on the quantum of the bond or ECB issue. Since the earnings of the power plants will be in Indian rupees, the two will have to set up a hedging mechanism in case of ECB borrowings, said Bagra.
The civil construction is complete by almost 87 per cent and now the supplies of the equipment etc. will be starting.
The two are setting up 2x700 MW capacity totalling to 1,400 MW with a deadline of March 2016.
However, Bagra said that the company is trying to hasten the construction and are aiming to complete by the 2015-end itself.
Nalco-NPCIL joined hands to build nuclear power plants in March last year. The power plants are coming up in Surat, Gujarat.