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FIs draw DPC funding plan with Rs 31 bn as 'to go costs'

Indian financial institutions, led by IDBI, are to draw up a funding plan to bail out the US energy major Enron's Dabhol Power Company with a 'to go costs' (balance funds required) amounting to Rs 31.11 billion ($662 million) as completion cost of the project's 1,444 mw phase II.

"The plan has a stipulated 11 month period commencing from November 1, 2001 to August 30, 2002 and will not include the interest during construction offshore loans of State Bank of India and Canara Bank," FI sources said in Bombay on Monday.

They said a situation may occur wherein the FIs would have to take a 'hard decision of requesting the Japanese Bank of International Co-operation to capitalise its entire IDC for phase-II.

"We may request the Indian government to initiate discussions with its Japanese counterpart for accruing further concessions in this case," sources added.

In fact, completion costs of phase II include non-IDC costs amounting to Rs 21.90 billion ($466 million) and IDC costs of Rs 9.21 billion ($196 million).

"Moreover, both Indian and offshore lenders will have to shell out Rs 5.83 billion ($124 million) and Rs 3.38 billion ($72 million) respectively as part of the funding plan," sources added.

As per the plan, offshore lenders would have to fund their IDCs to the tune of Rs 1.83 billion ($39 million) while the phase one cash accruals for equity stood at Rs 5.03 billion ($107 million).

The plan also envisages additional funds of about Rs 20.54 billion ($437 million) if the export credit agencies like JBIC, Exim Bank of USA and OND (Belguim Exim Bank) disburse the same.

"We are also planning to line up funds worth Rs 19.36 billion, if all the lenders collectively agree to disburse the additional funds," FI sources said adding current undisbursed commitments by the institutions were to the tune of Rs 6.06 billion ($129 million) and additional sanctions were about Rs 18.19 billion ($387 million).

Sources said there were several key challenges before FIs to save the almost defunct $3 billion power project.

"The most challenging is, in the worst case scenario, an additional exposure of Rs 51.70 billion ($1.11 billion) which includes $590 million towards cost completion, if phase one is not operational, and a $510 million take out of offshore loans," they said.

However, they added that Reserve Bank of India's current exposure norms and the domestic lenders' 'appetite did not permit such a high exposure'.

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