Tata Power and Lanco Infratech - the two winners of Mundra and Sasan ultra mega power projects -  are looking at different modes of financing their respective projects.

Tata Power is considering borrowing around Rs.7,000 crore from overseas markets for its Rs.20,000 crore Mundra project and Lanco Infratech is weighing a 'mostly rupee borrowing' for the Rs.16,000 crore Sasan project. Under the terms and conditions of the projects, the companies have a 12 month outer limit, within which they have to complete the financial closure of the projects.

The Sasan project is being structured on a 80:20 debt-equity ratio, with both the partners - Britain's Globleq and Lanco -  holding 50 per cent stake in the special purpose vehicle. Both the companies will contribute Rs.1,600 crore towards equity, while the remaining Rs.12,800 crore will be debt component. The 4,000 MW Sasan UMPP is likely to achieve financial closure by end-December 2007 or January 2008. Thereafter, the first of the six units will be commissioned in 36 months and one each six months thereafter. The project is scheduled for completion within 54 months.

Tata Power is likely to raise Rs.5000-7000 crore from overseas markets, including external commercial borrowings (ECB) and will mobilise about Rs.10,000-11,000 crore from domestic markets and financial institutions. The project will be implemented in a debt-equity ratio of 70:30.

Financial closure for the 4,000 MW Mundra ultra mega power project in Gujarat is expected by August 2007 and and generation is expected to start by 2011. The project requires 12 million tonne of coal and the company is in talks for importing coal for power project from various countries.

Also See:

Lanco, Tatas bag ultra mega power projects (18-Dec-06)