Tata Power, India’s largest private power company, today announced the completion of signing of financial agreements for 4000 Mw ultra mega power project (UMPP), coming up at Mundra, Gujarat under its special purpose vehicle (SPV) coastal Gujarat Power Limited (CGPL).

The cost of the project is estimated to be Rs 17,000 crore with the first of the five units to be commissioned in September 2011. The entire plant is expected to be commissioned by end of 2012.

A consortium of banks including leading multilateral agencies and exim banks are participating in the financing of this project. The financing comprises of equity of Rs 4,250 crores, external commercial borrowings (ECB) of upto $ 1.8 billion and rupee loans of upto Rs 5,550 crore. SBI Caps are the financial advisors and mandated lead arranger for rupee loans.

Prasad R Menon, managing director, Tata Power said "The signing of the financing agreements for Mundra UMPP is an important milestone. The terms of debt financing provides us long tenure of loans supporting our competitive bid price assumptions."

The 4,000 Mw Mundra UMPP is the first of the UMPPs, which heralds the entry of super critical boiler technology in India for the first time which is significantly environment friendly than the conventional ones using sub-critical boiler technology.

The project site, approximately 1,000 hectares is located south of Tunda Wand village in Mundra Taluka, Kutch district of Gujarat.

The project consists of 5 units, each of 800 Mw which will generate saleable power of 3,800 Mw to be supplied to five states namely Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.

The super-critical technology and the choice of unit sizes will help the project achieve higher efficiency thus saving fuel and reducing greenhouse gas emissions vis-à-vis conventional technology prevailing in the country.

The company has signed the contract for complete Boiler Island scope on EPC basis with Doosan Heavy Industries & Construction Co, Korea and contract for supply of Steam Turbine Generators with Toshiba Corporation. The project has been comprehensively covered by a seamless insurance cover by Oriental Insurance Co.