Reliance Power secures $1.1-bn in loans from Chinese banks for Sasan project

Reliance Power has secured $1.1 billion (over Rs6,000 crore) in loans from three Chinese banks to finance its upcoming 3,960 MW ultra mega power project in Sasan, Madhya Pradesh.

The first such Chinese financing of a power project in India, the loans will be used to refinance part of the Rs14,500-crore ($2.6 billion) rupee credit used for financing the coal-fired power project at Sasan, sources close to the development said.

The long-term loans have a duration of over 13 years and carry an interest rate of less than 5 per cent (four percentage points above the reported Libor), against the 13.5 per cent charged by its Indian lenders, sources said.

The loans have also been granted final approval by the State Council of the Chinese government. China's ministries of finance, foreign affairs and commerce have also granted approvals for Chinese banks' financing of the Sasan project, sources said.

Some of the large banks in China such as the Bank of China, China Development Bank and The Export Import Bank of China, along with Standard Chartered Bank are participating in the loan syndication.

China Export & Credit Insurance Corporation would provide the insurance cover, sources said.