Lanco Infratech today said China Development Bank will arrange loans worth USD 2 billion (over Rs 11,000 crore) for its two power projects, a move that will help in addressing the diversified group's liquidity concerns.
China Development Bank (CDB), owned by the Chinese government, would arrange loans to the tune of USD 2 billion for the group's two projects - Anpara Phase II and Himawat - each having capacity of 1,320 MW generation capacity. "Out of the total amount of USD 2 billion required to be raised, USD 600 million will be contributed by CDB and CDB will syndicate the balance from Chinese banks and financial institutions," Lanco said in a statement.
Lanco and CDB have entered into a Memorandum of Understanding (MoU) for the loan facilities. "This is going to help us in improving the economies of the project and shall help us in completing the power projects within the stipulated time," Lanco Infratech Chairman L Madhusudhan Rao said.
Lanco is also in the process of addressing the debt equity ratio at the same time, he added. Lanco's debt burden stood at nearly Rs 32,000 crore at end of 2012 June quarter.
China Development Bank has already sanctioned USD 200 million buyers credit for Amarkantak 3 & 4, Babandh and Vidarbha power projects.
The bank has sanctioned over USD 7 billion to Indian companies, the statement said.
The MoU was inked by Lanco Power CEO K Raja Gopal and China Development Bank Governor Zheng Zhijie.
Lanco has an operating capacity of 4,740 MW while 4,636 MW is under various stages of execution. The company aims to have 13,000 MW operating capacity by 2015.