Govt counter-guarantee for Bhadrawati project

NEW DELHI, Aug 1: The Bhadrawati Power Project finally received its counter-guarantee from the central Government today. But the financial closure for the project would take place only by early next year. The Government signed the counter-guarantee agreement for the fast-track 1.4-billion dollar Bhadrawati power project in Maharashtra to cover the payment risks against the 880 million dollar foreign loan.

The construction on the project, promoted jointly by the Ispat group and GEC Alsthom and Electricite de France, would start early next year after the financial closure is achieved, P K Mittal, project chairman, told newspersons after signing the document with the Finance Ministry. The Ispat group will hold 53 per cent of the equity in the project.

The negotiation between the Government and the promoters have led to a downward 18 per cent revision in the capital cost of the 1084-mw project, conceived in 1993, for supplying electricity to Maharashtra. The project authorities have already finalised thecoal supply agreement and would be shortly signing the power purchase agreement, he said.