According to reports, the Asian Development Bank will provide Rs 221 crore to Reliance Power for its Rs 700-crore 40 MW solar project in Rajasthan. The US Exim Bank has already agreed to fund Rs 304 crore.
With this, RPower has completed the financial closure of the project. The debt to equity ratio of the project would be 75:25 and RPower will infuse Rs 175 crore to address the equity portion. RPower said this was the first sanction by ADB as a direct loan to a private sector solar project in India.
The foreign financing route entails significant savings to RPower considering that foreign loans have a tenor of 18 years with lending rates of 3 to 4 per cent, while those from domestic banks generally have a 13 year tenor with interest rates of about 13.5 per cent.
The project is in Pokharan Tehsil, Jaisalmer district, Rajasthan. The solar panels are to be imported from US-based First Solar. The panels will be of thin film technology, taking into consideration the high temperature in Rajasthan.
The project is scheduled for commissioning in 2012. A long-term Power Purchase Agreement (PPA) for PV project has been signed with Reliance Infrastructure at MERC approved tariff.
Mr J.P. Chalasani, Chief Executive Officer, Reliance Power said, “This is the first solar power project to achieve the financial closure with global lenders only, resulting in substantial savings. This financing also re-affirms the long term relationship between Reliance Power and prestigious global lenders like ADB and US Exim bank, who are willing to provide financing to our projects even in the current challenging global environment.”
RPower said the 40-MW project would be followed by a 100-MW concentrated solar power (CSP) unit, to be commissioned by May 2013. For this, a long-term PPA has been signed with NTPC Vidyut Vyapar Nigam Ltd (NTPC’s power trading arm) at a tariff of Rs 11.97 per unit.