livemint.com: January 12, 2011
New Delhi: Macquarie SBI Infrastructure Fund (MSIF) and the State Bank of India (SBI) have together invested Rs 580 crore in a Moser Baer Projects Pvt Ltd power plant at Anuppur in Madhya Pradesh.
Varun Bajpai, chief executive of MSIF, said this makes the first phase of the 2,520MW thermal project, being built by Moser Baer’s subsidiary MB Power (Madhya Pradesh) Ltd fully funded.
The project is likely to become operational towards the end of 2014 to serve the states of Madhya Pradesh, Maharashtra and Gujarat, which are industrializing fast but face an acute power shortage.
The 1,200MW first phase requires an investment of Rs 6,240 crore. Moser Baer struck a debt arrangement of Rs 4,680 crore in 2009 with SBI and Axis Bank as the lead banks.
The remaining equity requirement of nearly Rs 1,000 crore is being infused by Moser Baer’s cash resources, Bajpai said.
The entire project will cost Rs 13,700 crore.
“We are very proud to be associated with both SBI and MSIF,” said Ratul Puri, director of Moser Baer.
“MSIF is a leading infrastructure fund investing in India... their in-depth understanding of the sector and long investment cycle make them an ideal partner for our thermal business.”
Lanco Infratech Ltd has been awarded the engineering, procurement and construction contract for the first phase and construction at the site has already started, Bajpai said.
India-focused infrastructure fund MSIF is a joint venture between Macquarie Capital and SBI, the country’s largest lender.
It has made three investments since July 2010, the largest going to telecom tower firm Viom Networks Ltd.
The SBI group is among the largest project loan arrangers globally, with funding aggregating at $11 billion for 21 projects in India from January to June last year. This deal will be its maiden private equity fund initiative.
India aims to halve its peak power deficit within two years. Reuters recently reported that the government was looking to reduce the shortfall to 6.5% in the year ending March 2012 from 13.8% in September last year.
Private equity investment in India’s power sector has totalled $2089.72 million since June 2009.
The largest reported deal was a $425 million investment in Asian Genco Pte Ltd by Morgan Stanley Infrastructure Partners, General Atlantic LLC and Goldman Sachs (Principal Investments), according to data from financial research platform VCCEdge.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.