JSW Energy (Ratnagiri) Ltd has achieved financial closure of its 1200 mega-watt (mw) power project based on imported coal. A consortium of 21 banks and financial institutions led by State Bank of India has committed to subscribe to the entire debt portion of Rs 3,375 crore of the project which is estimated to cost Rs 4,500 crore .

This is the country’s first imported coal based power project of such size in a single phase as independent power producer (IPP) to achieve financial closure.

The project has a debt equity ratio of 3:1 (rupee term loan of Rs 3,375 crore for 14.5 years and equity of Rs 1,125 crore). The pricing of the loan has been done in a manner so as to reduce the cost of borrowing for JSW Energy Ltd (JSWERL). The lenders are also de-risked from interest rate vagaries as the interest rate is benchmarked to SBI advance rate / respective banks’ PLR.

The project — promoted by JSWEL of the JSW group headed by Sajjan Jindal — which is located at Jaigad in Ratnigiri district of Maharashtra consists of four units of 300 mw each. The company has tied up part of its coal requirement with a chinese company and intends to acquire coal mines in Indonesia and Mozambique to meet the balance requirement.

Construction has commenced for this project and is expected to be completed in 3.25 years. A captive port at Jaigad for import and transportation of coal is also being proposed. Shanghai Electric Corporation has bagged the boiler turbine and generator contract for the project. All major clearances for the project have been obtained.