GVK Power and Infrastructure Ltd has achieved financial closure for one of its key coal mining projects located in Jharkhand.
Operated through a special purpose vehicle, GVK Coal (Tokisud) Company Private Ltd, the coal mine in Tokisud, Jharkhand, is being developed to supply coal to the company’s 540 megawatt thermal power project at Goindwal Sahib.
The captive coal mine in South Karanpura coalfield is worth Rs 300 crore. As per the financial closure, the project would be financed by equity of Rs 75 crore and debt of Rs 225 crore.
The debt was syndicated by IDBI Bank and has been funded by seven banks through a consortium lending.
The total amount spent on the project till date is Rs 32.74 crore.
GVK Coal (Tokisud) has entered into a coal supply agreement with GVK Power (Goindwal Sahib) Ltd for the sale of coal. The mine is expected to commence production in 26 months from the date of the financial closure.
The Tokisud mine is estimated to have total mineable reserves of about 52 million tonnes (mt) and annual supplies of about 2 mt.
While the total area required for the project is about 900 acres, the company has so far acquired about 500 acres.
The remaining land is expected to be acquired shortly since the company was focusing on financial closure first, a source tracking the developments said.
Coal transportation from the mines to the project site will be arranged by Indian Railways under a contract that has been executed between GVK Power (Goindwal Sahib) and Railways.
Luthra & Luthra Law Offices is the lenders’ legal counsel, Lahmeyer International India Pvt Ltd is the lenders’ engineer and Howden Insurance Brokers India Pvt Ltd is the lenders’ insurance advisor.
GVK has been working on a plan to develop two coal mines for assuring supplies to the Goindwal Sahib plant.
The other project is located at Seregarha in Jharkhand and is estimated to have geological reserves of about 67 mt. However, the production would not exceed one million tonne per annum.
This mine is still being worked on and is estimated to cost about Rs 300 crore.
According to analysts, the project would not commence operations before FY14.
Comments