SJVN achieves financial closure for 900 MW Arun-3 Hydro Power Project
SJVN has fulfilled all the conditions for the initial availability of funds by financers for its 900 MW Arun-3 Hydro Power Project
February 06, 2020
SJVN Limited has achieved the financial closure (a stage of project development when all the conditions of a financing agreement are fulfilled prior to the initial availability of funds by the financers) for 900 MW Arun-3 hydropower project on Thursday. The total debt tied up with the banks is equal to Rs 6,333.48 crore, which includes Rs 1,420.86 crore. The debt portion of Indian banks is Rs 5,374 crore. And Rs 960-crore debt portion has been committed by Nepalese banks. The SAPDC
(SJVN Arun-3 Power Development Company Pvt Ltd) management has taken a decision to use upfront equity for the construction of the project.
On this occasion, SJVN's CMD and SAPDC's MD Nand Lal Sharma said that the company will be investing approximately Rs 6,959 crore in Nepal over the next five years. The total financial benefits up to the handing over of the project to the government of Nepal (GoN) are estimated to be around Rs 21,166 crore. The event organised for financial closure was attended by SJVN Limited
's Director (Electrical) RK Bansal, Director (Personnel) Geeta Kapur, Director (Finance) AK Singh, Chief General Manager Suresh Thakur and SAPDC's CEO Arun Dhiman, along with other senior officers of SJVN Limited and SAPDC.
The financial closure of the project will ensure the realisation of 70 percent of the funding in the form of structured debt, while the remaining 30 percent will be direct equity from SJVN. As on date, investment of around Rs 875 crore has already been made.
He further said that the project is helping in socio-economic growth by generating employment opportunities for the locals, boosting local industries, and fostering entrepreneurship, development of infrastructure, such as roads and bridges and providing financial support for healthcare facilities and community centres etc. To support the local population, skill development training and programmes are being implemented.
Sharma expressed gratitude towards the government of Nepal, especially PM KP Sharma Oli for his constant support and guidance. He also thanked the government, Indian embassy, the investment board of Nepal, other ministries of the government of Nepal and locals residing in and around the project area for extending their co-operation and support.
He further told that Arun – 3 Hydro Power Project was awarded to SJVN Limited through international competitive bidding by the government of Nepal. The memorandum of understanding (MoU) for the execution of this project on BOOT basis was signed with the government of Nepal on March 2, 2008. Accordingly, SAPDC was incorporated and registered on April 25, 2013, as a private limited company under the Nepalese Companies Act 2063. The project development agreement (PDA) for the execution of the project was signed between SAPDC and the Investment Board of Nepal (IBN), the government of Nepal on November 25, 2014.
All major works such as civil, hydro-mechanical and electro-mechanical works of the project were awarded by April 2018. The foundation stone for the project was laid jointly by the Prime Minister Narendra Modi and PM of Nepal Oli on May 11, 2018. The construction activities of the project are going on in full swing.
Sharma further said that SJVN has also forayed into the fields of renewable energy, power transmission and thermal and has envisaged internal growth targets of an installed capacity of 5,000 MW by 2023, 12,000 MW by 2030 and 25,000 MW by year 2040.