GMR Kamalanga Energy Limited (GMR Kamalanga Energy), a subsidiary of GMR Energy Limited of GMR Group, attained financial closure for its INR45.4 billion ($953.7 million), 1,050 megawatts (MW) coal-fired project that is being set up at Kamalanga Village, Dhenkanal District in Orissa. The INR45.4 billion investment is being divided at a debt to equity ratio of 3:1. The debt portion of INR34.05 billion ($715.6 million) is tied up with 13 banks.

For the debt component, the company has tied up with Canara Bank, Andhra Bank, Central Bank of India, Bank of Baroda, IDBI Bank, Corporation Bank, IDFC Ltd., Indian Bank, Punjab & Sind Bank, United Bank of India, State Bank of Mysore, State Bank of India and UCO Bank. IDFC is the syndicator of the debt and the sole debt arranger.

The equity portion of INR11.35 billion ($238.4 million) is being tied up by GMR Energy Ltd. and IDFC in the ratio of 80:20. The loan tenure will be 16 years.

GMR Energy Ltd. has signed a memorandum of understanding (MoU) with the Government of Orissa for setting up of 1,050 MW coal based thermal power project in Orissa. GMR Kamalanga Energy is a special purpose vehicle of GMR Energy Limited.

GMR Kamalanga Energy has awarded the EPC contract to the Shandong Electric Company, China under the International Competitive Bidding route and Notice to Proceed to the Contractor has been issued on May 27, 2009. The project has received all the required permits and clearances. The project has also obtained an in principle clearance for mega power status from the ministry of power, GOI. The project will go on stream in the current five year plan.

The pre Notice to proceed (NTP) enabling works has already commenced at the site fully complemented by a well prepared project team.

The company has also received coal linkage to meet the entire capacity. Also ministry of coal, GOI, has allocated the Rampia and Dip Side Rampia Coal Block in Orissa, along with other prominent power developers. The development of the coal block will take place simultaneously with the construction of the Kamalanga Power Project.

The company had signed the power purchase agreement with Grid Corporation of Orissa (GRIDCO) for the sale of 25% of the power generated from the project as well as the power above 80% plant load factor at a tariff fixed by Orissa Electricity Regulatory Commission (OERC). It has also won under case 1 bidding the rights to sell 323 MW power to Haryana Power Generation Corporation, competing against major power generating companies. The power purchase agreement for the same had already been executed. To enable smooth evacuation of power to the end customers, the company has signed a bulk power transmission agreement with the Power Generation Corporation of India Ltd.