SJVN: Thermal signs loan agreement with PFC & REC
SJVN Thermal signs loan agreement with PFC & REC.
October 19, 2022
In the august presence of Sh. Nand Lal Sharma, CMD, SJVN Ltd. and Sh. Ravinder Singh Dhillon, CMD, PFC a loan agreement between SJVN Thermal Pvt Ltd (STPL), PFC & REC for debt component financing in the amount of Rs.8520.92 Crore for the thermal power project of 1320 MW from Buxar located at Chausa, Buxar district in Bihar in a glittering ceremony in Delhi. On occasion Smt. Geeta Kapoor, Director (Personnel), Sh. AK Singh, Director (Fin.) & Sh. Sushil Sharma, Director (Electrical), SJVN Ltd., Sh. Ajay Choudhary, Director (Fin), REC, Sh. Vijay Kumar Singh , Director (T), REC, Smt. Parminder Chopra, Manager (Fin.), PFC, Sh. Rajiv Ranjan Jha, Manager (P), PFC Sh. Manoj Sharma, Manager (C). PFC and Sh. Manoj Kumar, CEO and Sh. Manoj Kumar, CFO, STPL were present.
Addressing the gathering on this occasion, Sh. Nand Lal Sharma, CMD, SJVN emphasized the need for power for the overall development of the nation and the contribution of SJVN in this regard. He said that with an installed capacity of 2016.5MW and an ambitious plan to add 50,000MW to its portfolio by 2040, SJVN has become a major power player in the country. Further, he added that with the commissioning of the 1320MW thermal power project in Buxar in June 2023, Bihar’s power deficit will be largely closed and will result in a remarkable improvement in the socio-economic status of the people of the state. While thanking the government of Bihar. and the district administration for their continued support to the project, Sh. Sharma also expressed his gratitude to PFC & REC for resting their trust in SJVN and extending their support by financing the debt component of the project.
Initially, a Memorandum of Understanding for Term Loan Funding for BTPP was signed between SJVN, PFC and REC on November 26, 2O2O, but the agreement was not signed due to higher interest rate. raised. Currently, there is an upward trend in the debt market due to the continuous increase in the REPO rate by RBI to control inflation. Subsequently, the issue regarding the refinancing of the term loan was taken up with PFC & REC for better rates and terms, after detailed discussions and negotiations they finally offered a liberal interest rate of 8.60% per annum (including spread) for financing Rs .8520.92 Crore. As a result, STPL has decided to swap the existing debt, which will result in a significant saving of approximately Rs.174 Cr. over the life of the loan due to STPL paying interest under the current market scenario. This will also result in cheaper electricity for STPL consumers.
1320 MW thermal power project in Buxar allocated by Bihar government. when commissioned will generate 9828 MU of electricity per year. In accordance with the power purchase agreement with the Government of Bihar, 85% of the electricity generated by the project will be supplied to the State of Bihar and 15% will be sold at bus bar tariff to other electricity buyers.