Lenders restructure Rs 14500 crore loan for Reliance Power’s Sasan UMPP

MUMBAI: Lenders have restructured the Rs 14,500-crore loan to Reliance Power’s Sasan project. The repayment schedule has been extended to March 2015 and the interest rate has been raised from 14.5% to 14.70%, officials said. The commissioning of 4,000 MW Sasan ultra mega power project (UMPP) is delayed by 15 months. The commercial operation date has been postponed from March 2013 to June 2014.


Lenders said the loan has been restructured due to the extension in the date for commercial operation and the consequent extension in the repayment schedule. They clarified that it is not due to any cash crunch faced by the company.

Banks have to set aside 2.75% of the outstanding loan when an account is classified as restructured. Several banks classified the Sasan project as restructured in the fourth quarter FY 2012-13. As per the Reserve Bank of India rules, banks do not have to classify an account as restructured if the date of commercial operation of an infrastructure project is extended within two years. However, if the repayment schedule is extended along with this date, the account has to be classified as restructured. A spokesperson of Reliance Power said, “Sasan Ultra Mega Power Project, the world’s largest integrated power and coal mine project, is being implemented much ahead of the originally envisaged schedule. The project is unique that it enjoys the confidence of many large domestic and international lenders who have reposed faith on our project execution capabilities and on the efficient operations of the plant as well as the integrated coal mines”.

The total project cost is estimated at Rs 23,000 crore. Among lenders, Power Finance Corporation has the highest exposure of Rs 3,770 crore, followed by IIFCL UK office at Rs 3,688 crore (see graphic). Of the six units of the project, the company has commissioned the first unit of 600 mw in March 2013. The electricity generated from the project would be sold to 14 distribution companies across seven states.

According to a company official, the first unit was to be commissioned by May 2013 and the entire project by April 2016, as per the original agreement with the government. However, as per the agreement with lenders, the date for commissioning of the first unit was rescheduled to December 2011 and the entire project date to March 2013. However, due to delays in receiving clearances the execution of the project got delayed, said officials who did not want to be named