Reliance Power Ltd is planning to raise as much as $2.5 billion through India's largest rupee-denominated loan this year to fund a power project, two bankers familiar with the matter said on Wednesday.

Reliance Power, part of the Anil Dhirubhai Ambani Group, has hired SBI Capital Markets, a unit of State Bank of India, to raise the funds for its 3,960 megawatt coal-fired plant at Sasan in central Madhya Pradesh state, the sources said.

"The loan is open and we are hopeful of closing it in early October," one banker involved in the deal said. He declined to be named as he is not authorised to speak to the media. The loan priced at 11.75 percent will be for a tenure of 15 years, they said.

Sterlite Industries has said it plans to raise $1.6 billion in a syndicated rupee loan to build a power plant in the eastern state of Orissa.

Reliance Power, which raised $3 billion in India’s largest ever IPO in January, would contribute about 54.6 billion rupees ($1.3 billion) from the issue as equity for the project, it said in its IPO offer document.

India's power sector needs 10 trillion rupees of investment in the five years to 2012. Asia's third-largest economy suffers from peak power shortages of about 12 percent and an overall energy deficit of about 10 percent. Reliance Power is also talking to Standard Chartered Bank, Daiwa Securities SMBC and India Infrastructure Finance Co Ltd for a foreign-currency loan of up to $1.5 billion, sources said.

... contd.