Nuclear Power Corporation (NPCIL), India’s lone nuclear power generation utility, is going ahead with its aggressive capacity addition plans despite the renewed concern over safety of nuclear power generation after the Fukushima disaster.
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 country’s 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