Tata Power has received a major boost as the International Finance Corporation (IFC), which is a member of the World Bank Group, will lend $450 million (Rs 1,800 crore) for setting up the 4,000 MW Ultra Mega Power Project (UMPP) at Mundra in Gujarat. IFC’s board of directors have taken a decision in this regard.

The IFC release said the first of the power plant’s 800-MW units is expected to be commissioned in mid-2011, while other units would be launched at intervals of four months each. The ultra mega power project, which Tata Power won through a competitive bidding process, will create 5,000 jobs during construction and 700 jobs once it is operational. Mundra UMPP would supply power in five states of western and northern India.

Of the total project cost of $4.2 billion, IFC would provide $450 million with a repayment period of 20 years. The long-term financing would improve the risk profile of the project and would facilitate funding from local banks of around 15 years maturity. Other lenders to the project include Asian Development Bank ($450 million), Korean ECA ($800 million), and local banks ($1.5 billion), besides an equity component of $1billion.

Tata Power has already signed an engineering, procurement, construction (EPC) contract for the supply of five 800 MW steam turbine generators with Toshiba Corporation for the Mundra UMPP. Toshiba Corporation’s scope of work includes- the design, manufacture, test and supply of equipment related to the steam turbine generator packages for the five units of 800 MW each. They will also be associated with supervision of commissioning of the turbines.

Besides, Tata Power has also signed a contract for complete Boiler Island scope on an EPC basis with Doosan Heavy Industries & Construction Co Ltd, Korea. The contract for complete Boiler Island includes super critical boilers for the 5 units of 800 MW each, based on super-critical technology required for such large-sized units.

Complimenting India for using super-critical technology for coal-fired projects, IFC director Rashad Kaldany said, “The project will encourage other developing countries to make responsible choices, use the best available technologies, and apply higher environmental and social standards.”