NPCIL is in talks with a consortium of 12 European banks, including BNP Paribas SA, HSBC Holdings Plc and Societe Generale, to raise as much as 4 billion euros ($5.7 billion) to finance its proposed 10,000 mw nuclear power plant at Jaitapur in Maharashtra. Reactors for this plant the largest in the world will be supplied by Areva, a French nuclear power equipment manufacturer, according to a senior NPCIL official.
The loan will be guaranteed by French trade credit insurance company Coface SA. The total cost of the project, with a debt-equity ratio of 70:30, is about $18 billion. The PSU will have to arrange for the rest of the loan component from domestic lenders such as Power Finance Corporation.
The challenge of large-scale nuclear power capacity addition in a rapid manner has, indeed, provided an opportunity for further enhancing countrys capability in adopting and implementing diverse technologies, says NPCIL chairman and managing director SK Jain.
The state-owned generator plans to put up six reactors each with 1,650 mw capacity at Jaitapur. The ministry of environment and forests (MoEF) recently issued environmental clearance for the project after dithering over the issue initially.
Some environmentalists had raised concern about the possible environmental impact of putting up such a large nuclear power plant at a site that according to them, falls in a seismically sensitive zone. Besides, concerns were also raised about the safety of the European Pressurised Reactors to be supplied by Areva on the ground that it is a technology that is yet to be tested.
We have funding commitment of more than what we require, NPCIL finance director Jagdeep Ghai was quoted as saying by agencies in Mumbai. There is absolutely no problem with bankers, although they have also increased their due diligence after the Fukushima event.
The loan will likely have a 17-year maturity and the rate of interest may be as much as 7%, Ghai said. The company is also looking to borrow $250 million through a loan with maturity of five to seven years.
Indias plan to increase nuclear power generation about 13-fold is back on track following a safety review after the Fukushima disaster. Following the accident at the Japan's Fukushima nuclear power plant, the Indian government ordered a comprehensive review of safety of its operational nuclear power plants also of the preparedness of the operator to deal with nuclear contingencies. The government also plans to tighten regulatory norms for nuclear power plants.
The department of atomic energy (DAE), which is directly concerned with India's nuclear power generation programme, has maintained that the Japan crisis should not be cause of alarm or panic. If anything, it should trigger further safety enhancements.
The installed capacity in nuclear power generation is about 4,800 mw, the bulk of which is based on small reactors in the size of 220 mw. But following the Indo-US civil nuclear deal in 2008, India has chalked out ambitious capacity addition in nuclear power generation using large-sized reactors to bridge its growing electricity shortfalls. For example, the government has planned five nuclear parks, each with 10,000 mw capacity, at various locations including Jaitapur in Mahrashtra. These projects will be based on large-sized imported reactors. India plans to increase its nuclear-generation capacity to 63,000 mw by 2032.
The NPCIL development comes close on the heels of a huge uranium deposit find in Andhra Pradesh.
The Tumalappalli mine, experts claim, could turn out to be among the biggest reserves of the mineral in the world. The Andhra mine has a confirmed 49,000 tonne of ore and there are indications that it could hold reserves totalling three times its current size.