October 08, 2008

Reliance Power to achieve financial closure for hydro projects by 2009

BL reported that the hydro power business of Reliance Power, which is poised to invest about INR 10,500 crore in 3 projects with total capacity of 2,100 MW, is in the process of expediting clearances and also achieve financial closure by the first half of 2009.

Reliance Power, which is executing 700 MW project at Tato II in West Siang District of Arunachal Pradesh, 1,000 MW of Siyom project at West Siang district of Arunachal Pradesh and 400 MW at Urthing Sobia in Pithorgarh district of Uttaranchal, is planning for some more projects coming up for competitive bids.

A senior Reliance Power official said that "The focus of the company is on expediting the process of implementation of these projects. We believe that we are well placed to implement them ahead of the 6 year time schedule provided to us."

The official said that with the government’s recent hydel policy, which also provides for merchant power sales, that is a big boost for such hydel projects, these are now well poised to achieve financial closure which we expect to do so by early 2009. He added that apart from sales through the Central Electricity Regulatory Commission fixed rates for supplies to states, the ability to offer merchant sales is a big booster for these projects as it allows pricing arbitrage and higher returns.

Reliance has appointed consultants SMEC of Australia for Urthing Sobla, SNC Levalin of Canada for Tato II and Halcrow of the UK for Siyom for preparation of detailed project reports.