Tata Power Company Ltd Case Study

Page 1 of 26

Tata Power Company Ltd Case Study

By | October 2010
Page 1 of 26
Tata Power Company Limited
“The signing of the financing agreements for Mundra UMPP is an important milestone. The good response demonstrates the faith of the lenders in our execution capabilities and expertise to complete the project in time. The terms of debt financing provides us long tenure of loans supporting our competitive bid price assumptions.” – Mr. Prasad R. Menon, Managing Director, Tata Power On April 24, 2008 The Tata Power Company Limited (TPCL), India’s largest private power company, signed a financial agreements with a consortium of banks for 4000 MW Ultra Mega Power Project (UMPP), coming up at Mundra, Gujarat under the Special Purpose Vehicle (SPV) Coastal Gujarat Power Limited (CGPL). The cost of the project is estimated at INR 170,000 million (USD 4.2 billion) with the first of the five units to be commissioned in September 2011. The entire plant is expected to be commissioned by end of 2012. The company decided to finance the project with a debt-equity ratio of 70:30 comprising of equity of Rs.42,500 million External Commercial Borrowings (ECB) of up to USD 1.8 billion and Rupee Loans of up to Rs.55,500 million. The banks that financed ECB’s include The Export-Import Bank of Korea, International Finance Corporation, Korea Export Insurance Corporation, Asian Development Bank, and BNP Paribas. While the domestic banks that financed rupee loan includes State Bank of India (SBI) (Lead bank for rupee lenders), India Infrastructure Finance Co. Ltd., Housing and Urban Development Corporation Ltd., Oriental Bank of Commerce, Vijaya Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore and State Bank of Indore. SBI Capital is the financial Advisor and Mandated Lead Arranger for Rupee loans. This is the first Ultra Mega Power Project in India built on super critical technology to improve efficiency and to decrease green house gases. The Government of India in its ambitious project of adding 73 GW of power during...