Oriana Power’s board has approved the issuance of a corporate guarantee covering 74 per cent of a Rs. 4.6 bn working-capital facility for its subsidiary, Oriana Usolar Joint Venture. The guarantee will be provided in favour of State Bank of India (SBI), which will act as the security provider for the facility.

The funding will support development of a 234 MW alternating-current (AC) grid-connected floating solar photovoltaic (PV) plant at the Damodar Valley Corporation (DVC) Maithon Dam Reservoir in Jharkhand. DVC awarded the project, while Oriana Power has received the engineering, procurement and construction (EPC) contract for its execution.

The guarantee will take effect after approval from Oriana Power’s shareholders. It will remain valid for the tenure of the working-capital facility, which has initially been set at 12 months and may be renewed annually. The facility will be repayable on demand.

Oriana Power said the guarantee would be issued on arm’s-length terms. The company’s promoter, promoter group and group companies have no interest in the transaction, according to the regulatory filing.

The company has also received purchase orders from a renewable energy developer for setting up the 234 MW grid-connected floating solar plant at the Maithon reservoir. The project scope includes the supply of plant and equipment, EPC services, and long-term operation and maintenance support.

The overall contract value is estimated at Rs. 11.81 bn, inclusive of goods and services tax. The value covers three separate contracts for plant and equipment supply, EPC services, and long-term operation and maintenance. The project is expected to add to Oriana Power’s execution portfolio in utility-scale renewable energy while expanding floating solar capacity in the region.