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Reliance Power exports equipment from Andhra Pradesh to Bangladesh
Reliance Power has begun exporting power equipment from its Andhra Pradesh-based Samalkot project to its Bangladesh-based project, a move that will help the company pay off nearly Rs 1,500 cr in debt
The Bangladesh project has purchased Module 1 of Reliance Power's gas-based power equipment, which has a capacity of 750 MW.
According to a senior company official, the sale of this equipment from the Samalkot to the Bangladesh project will reduce Reliance Power's US-EXIM debt by nearly Rs 1,500 cr.
The Bangladesh project is being developed in collaboration with JERA, a Japanese energy company.
The project's first phase of 750 MW generation capacity has also reached a financial close. The Bangladesh project's engineering, procurement, and construction (EPC) contractor is Samsung C&T Corporation.
Reliance Power had imported three modules of gas-based power equipment for its Samalkot project, but due to a lack of gas in the country, the project was unable to get off the ground.
These power generators are now being used in the company's Bangladesh project.
The Samalkot project's total US-EXIM debt is around Rs 2,500 cr, of which Rs 1,500 cr will be repaid with the sale of Module 1.
The sale of the remaining two modules is expected to raise enough money to pay off the company's remaining debt of Rs 1,000 cr while also providing additional funds.
The sale of Modules two and three are being pursued in collaboration with US-EXIM, and will generate surplus for Reliance Power after the balance of the US-EXIM debt is paid off.
In June 2019, Reliance Power entered into a debt restructuring agreement with US-EXIM for its Rs 2,430 cr debt.
The US-EXIM had agreed to convert the amortising repayment schedule to bullet repayments and extend the loan maturity date to June 2022. The interest rate had also been lowered to 2.65% per annum.
Despite the challenges posed by Covid-19, Reliance Power's power plants remained fully operational.
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