Reliance Power to replace $2.2 billion costly debt with cheaper Chinese and US loan

NEW DELHI: Reliance Power will replace three-fourth debt raised for the Rs 15,000 crore Sasan ultra mega power project with cheaper Chinese and American finance. The company said the re-financing would significantly reduce the interest cost for the Sasan project in Madhya Pradesh.

The company on Friday said it received a nod from the Reserve Bank of India to raise $2.2 billion (about Rs 10,500 crore) from US Exim and Chinese banks.

Sasan Power Ltd, a wholly-owned subsidiary of Reliance Power, will receive $1.1 billion from Chinese banks including Bank of China, China Development Bank and Export Import Bank of China. The Export Import Bank of United States has approved funding $917 million to Sasan project. Reliance Power said draw down of the funds would begin over the next few weeks.

“We are delighted that these prestigious financial institutions in US and China have
confidence in our power generation business and are willing to provide long-term loans to us even in challenging global conditions. It reduces our cost of debt and widens our source of funding for the Sasan project,” Reliance Power chief executive officer J P Chalasani said.

In addition to the funding from US and Chinese banks, the Sasan project has raised $150 million from other sources.