On 28 December 2006, Power Finance Corporation awarded the Letters of Intent to Lanco Infratech and Tata Power the two successful bidders for setting up the Sasan and Mundra ultra mega power projects, respectively.

Lanco and Tata Power had emerged the lowest bidders for the two 4,000 MW projects, to be set up in Madhya Pradesh and Gujarat, at a total investment of up to Rs.40,000 crore.

The Lanco-Globeleq combine had quoted a tariff of Rs.1.196 per unit to outbid nine other companies for the coal pithead-based Sasan project in Madhya Pradesh. Tata Power had out bid five companies with a tariff of Rs.2.26 per unit for the imported coal-based Mundra project.

The Sasan project is likely to achieve financial closure by December 2007 and the first unit will start generation by 2011-12. The company is likely to execute the project in a debt-equity ratio of 80:20 and may raise funds through external commercial borrowings.

PFC is also expected to award two more projects in Andhra Pradesh and Jharkhand, by April-May 2007.

Also See:

Tata Power, Lanco opting different modes for financing UMPP's (19-Dec-06)