R-Infra's western region project achieves financial closure

Reliance Infrastructure (R-Infra) has achieved financial closure of the Western Region System Strengthening (WRSS-II) power transmission project and a consortium of banks led by State Bank of India will fund about Rs 970 crore as debt for the project. The Rs 1,385-crore project, with a debt-to-equity ratio of 70:30, would be funded by major banks and financial institutions, including India Infrastructure Finance Company Ltd, Vijaya Bank, State Bank of Hyderabad, South Indian Bank, United Bank, Andhra Bank and Bank of Maharashtra. The banks offered to fund about Rs 1,200 crore, which is more than the required debt amount.  R-Infra will offer the 30 per cent equity of about Rs 415 crore.

This is the first independent private power transmission utility in the country achieving financial closure within less than three months of implementing the power transmission agreement (PTA). The WRSS-II is to upgrade the power transmission network to flow upto 4000 mw of power from power surplus Eastern and North - Eastern regions to Western region and facilitate overcoming the grim power situation in Western India. R-Infra had won two projects - B and C, through international competitive bidding, by offering at a levelised tariff rate of Rs 170 crore per year for a period of 22 years from the commercial operation date of the projects.

Reliance Power Transmission Limited (RPTL), a wholly-owned subsidiary of RInfra, will set up nine 400 KV double circuit transmission lines covering 1,035 Km in Maharashtra and 483 Km in Gujarat and Madhya Pradesh under the two projects. Projects A and D of WRSS are being developed by Power Grid Corporation India (PGCIL) in association with power utilities, which involve setting up of 14 transmission lines and 20 sub-stations.

RPower should complete and commission the projects by December 31, 2010 but is now awaiting clearance from the Ministry of Power as per Section 164, which is required to start work by a licensee in transmission. RPTL has also qualified for bidding in three projects worth over Rs5500 crore, which include the North Paranpur Transmission System and Talchar-II of Rural Electrification Corporation (REC) and Northern Inter-regional Connection Grid of the Power Finance Corporation (PFC).