East Coast Energy Private Limited (ECEPL) has borrowed Rs. 6,570 crore ($1.46 billion) from the Power Finance Corporation Limited (PFC) (PFC is not the only lender to sanction Rs. 6,570 crore, PFC only sanctioned a debt of Rs.1,600 crore out of total of Rs. 5,789 crore and other banks and Financial Institutions also contributed) in order to execute the East Coast 1,320 MW coal based thermal power project in Srikakulam District in the State of Andhra Pradesh. 

In another power project deal which took place late June this year, Indiabulls borrowed Rs. 6,789 crore ($1.5 billion) from the PFC (PFC is not the only lender to sanction Rs. 6,789 crore, PFC only sanctioned a debt of Rs.1,500 crore out of total Rs. 5,092 crore and other banks and Financial Institutions also contributed) in order to execute the 1,350 MW coal based thermal power project at Sinnar in Nashik District in the State of Maharashtra with an estimate of Rs. 5,092 crore ($1.13 billion). 

FoxMandal Little acted as the lenders legal counsel i.e. for the Power Finance Corporation and for group of consortium lenders. The team was lead by Senior Associate Rajesh Sehgal along with Associates Mili Chatterjee and Shefali Jain. East Coast Energy Private Limited and Indiabulls were both advised by their in-house counsels.

Speaking to Bar & Bench, Rajesh Sehgal said, “With regard to the ECEPL Power project, it was quite challenging to complete the transaction along with aligning the commercial terms of a leading PSU i.e. Power Finance Corporation with a nationalised bank i.e. State Bank of India along with more than a dozen other lenders was quite a tough task.  The unique feature was, ECEPL Power Projects total debt tie-up is of Rs.4,927 crore, is the biggest debt tie-up in the State of Andhra Pradesh for any Power Project”.

He added to say, “It was somewhat a challenge to complete the Indiabulls transaction in a record time of three weeks from the date of last sanction towards the debt tie-up”.

Power Today reports that, “The plant is expected to go on stream by January 2013. The power project is estimated to cost 8,000 crore. The Indiabulls Group is developing a multi-product SEZ on 2,500 acre land at Sinnar. Of this, nearly 1,000 acre will be used for the proposed thermal power plant. Of the total power generated by the plant, about 950 MW will be given to the Maharashtra State Electricity Distribution Company (MSEDCL), around 50 MW will be losses and the remaining 350 MW will be sold to the Government at Rs 3.26 per unit”.

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