GMR Group achieves Financial Closure of GMR Kamalanga Energy Ltd

GMR Kamalanga Energy Ltd owned by GMR Energy Ltd of GMR Group, a major infrastructure developer has achieved financial closure today. The project is being set up at Kamalanga Village, Dhenkanal District in the State of Orissa. The capital cost of the project at Rs 4540 Crore (Rs 45,400 million) or $953.68 million is being met through a combination of debt and equity in the ratio of 3:1. The debt component of Rs 3405 Crore (Rs 34,050 million) or $715.56 million has been tied up with 13 banks. This includes Andhra Bank, Bank of Baroda, Canara Bank, Central Bank of India, Corporation Bank, IDBI Bank, Indian Bank, IDFC Ltd., Punjab & Sind Bank, State Bank of India, State Bank of Mysore, UCO Bank, United Bank of India.

IDFC is the sole debt arranger and syndicator of the debt. The equity portion of Rs 1135 Crore (Rs 11,350 million) or $238.42 million is being tied up by GMR Energy Ltd and IDFC in the ratio of 80:20. The loan tenure will be 16 years.

The Memorandum of Understanding (MOU) has being signed by GMR Energy Ltd with the Government of Orissa for setting up of this 1050 MW Coal based Thermal Power Project in Orissa. GMR Kamalanga Energy Ltd is a Special Purpose Vehicle (SPV) of GMR Energy Ltd, for implementing the Project. GMR Kamalanga Energy Ltd has awarded the EPC contract to the Shandong Electric Company, China under the International Competitive Bidding route and Notice to Proceed to the Contractor has been issued today. The project has received all the required permits and clearances. The project has also obtained an in principle clearance for Mega power status from the Ministry of Power, GOI. The project will go on stream in the current five year plan.

"A unique feature of the project is that it has absolutely no displacement of people from the site, qualifying it as a very appropriate and most suitable location," said Mr. KVV Rao, Managing Director of GMR Kamalanga Energy Ltd and Director of GMR Energy Ltd.

The pre Notice to proceed (NTP) enabling works has already commenced at the site fully complemented by a well prepared project team. The company has also received coal linkage to meet the entire capacity. Also Ministry of Coal, GOI, has allocated the Rampia and Dip Side Rampia Coal Block in Orissa, along with other prominent power developers. The development of the coal block will take place simultaneously with the construction of the Kamalanga Power Project. The Company had signed the power purchase agreement with Grid Corporation of Orissa (GRIDCO) for the sale of 25% of the power generated from the project as well as the power above 80% PLF at a tariff fixed by Orissa Electricity Regulatory Commission (OERC).

The Company has also won under case 1 bidding the rights to sell 323 MW power to Haryana Power Generation Corporation, competing against major power generating companies. The power purchase agreement for the same had already been executed. To enable smooth evacuation of power to the end customers, the company has signed a bulk power transmission agreement with the Power Generation Corporation of India Ltd. In line with the GMR Group's commitment to social and developmental initiatives, the Company has taken up several social welfare works for the development of the project and its peripheral areas through its social wing, GMR Varalakshmi Foundation (GMRVF).

The GMR Group is an early entrant in the Indian Power Sector post its liberalization and has created a niche for itself in the Sector. It has already set up three Power Plants which are under operation. These include a 200 MW - the world's largest diesel power plant in Chennai, the first Independent Power Producer (IPP) in Tamilnadu; a 220 MW - world's largest Barge Mounted Power Plant in the State of Karnataka and a 370 MW - Gas Based Power Project at Vemagiri in the State of Andhra Pradesh, all located in the southern states of India. The projects have been running successfully and the barge mounted power project had completed its term of power purchase agreement with the Government of Karnataka in the year 2008.

The Group's energy business today accounts for 55% of its revenue stream. This is slated to increase in the future. Towards this, the Group has several concrete plans to enhance its generation capacity over the next five years to meet its vision of being a significant Energy player in the country.

Source : Equity Bulls

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