KSEB to rope in rating co to review escrow capacity

More than six IPPs with a combined capacity of over 2,500 mw are seeking escrow guarantee from the board. The IPPs in race for escrow cover include the 650 mw Kannur Power Project Ltd promoted by the KPP Nambiar and Associates, the 600 mw Vypeen Power Project promoted by the Siasin Energy Ltd, a 100 per cent subsidiary of the Malyasian powerhouse Pembinanan Energy Ltd and the 1,200 mw combined cycle power station promoted by the Cochin Refineries Ltd led consortium. Promoters of all these projects are crying wolf against the SEB’s prolonged delay in providing escrow cover.

IPPs are of the view that the financial institutions and banks are reluctant to fund the debt segment of their project cost in the absence of solid guarantee from the SEB. The SEB so far had given escrow guarantee only to the 165 mw BSES Kerala Power Ltd in Kochi.

The SEB had earlier appointed a team of its officials to work the escrow capacity of the board. The officials had submitted their report to the board putting the escrow capacity some where in the range of 500-600 mw.

However, this estimates drew flak from some quarters on the grounds that it did not take into account several key variables like the SEB’s debt burden by way of redeeming the bonds and debentures it issued earlier, which is slated to mature soon and its outstandings to NTPC in lieu of power purchased from the Kayamkulam thermal station.

Following these, the board of the SEB has decided to give the task of assessing its escrow capacity to an independent and reputed agency with experience in assessing the income streams and escrow capacity of the board. The mantle is likely to fall on CARE, it is reliably learnt. The rating company will be asked to assess the escrow capacity of the board incorporating all possible variables, sources said.