Top industry sources told The Financial Express that in addition to this, PSEG has also picked up 50 per cent equity in the project and will flush in Rs 337 crore towards the equity of the project. The equity infusion by PSEG will be made by its Mauritius arm, PSEG North Chennai Limited, Mauritius. Tri Sakthi Investments Limited, a Mauritius based group company of Pembian Redzai, will pick up the balance 50 per cent equity by contributing another Rs 337 crore.

The capital outlay of the project, as approved by the central electricity authority (CEA) is Rs 2246.5 crore, at an exchange rate of Rs 35.5 US$, out of which 30 per cent is equity, amounting to Rs 674 crore. The balance cost of the project will be raised by way of debt amounting to Rs 1572.55 crore.

Sources said that the debtfinancing amounting to Rs 1572.55 crore for the project will be done through a combination of export credit guarantees and term loans from the international and Indian financial institutions and commercial banks.

All foreign investments in this company will be routed from the Mauritius based group companies of the project promoters. PSEG and Tri Sakthi will flush in equity through their Mauritius based companies, PSEG, Mauritius and Tri-Sakthi Investments, Mauritius. Whereas, earlier the approved foreign equity for the project was Rs 72.9 crore, the promoters had recently sought Foreign Investment Promotion Board's (FIPB's) clearance for fresh foreign equity of Rs 674 crore, after PSEG agreed to share 50 per cent equity with the promoters.

Officials informed that the company has recently been granted approval by the FIPB to set up this project with 100 per cent foreign investment. The new equity structure sought by the promoters, with PSEG and Tri Sakthi Investments picking up 50 per cent equity each, hasalso been approved by FIPB.

The ministry of power has already extended its approval to this project. The techno-economic clearance (TEC) for the project has been obtained from the CEA. The project being executed by the promoters, is the third in the series of projects currently being undertaken in the state by the private sector. Another 1050 MW, Rs 4500 crore power project in North Madras is being put up by Videocon International along with ABB.

Two more projects have been identified by the state government to be executed by the private sector. These includes the 1320 MW Cuddalore thermal power project and the 250 mw Srimushman lignite power project at an estimated cost of Rs 4242 crore and Rs 108 crore respectively.

Sources said that Tri Sakthi has also entered into an MoU with the state government for executing this project. The detailed project report (DPR) for these projects have been received by the state authorities but the projects are awaiting clearances from other project authorities.

Incase of Cuddalore, the jetty clearance from the ministry of surface transport is still awaited and the IPP will submit revised cost based on further discussion with the state authorities.

For Srimushman lignite project, coal ministry's approval for mining lease and plan is awaited. This project is being promoted by Ticapco. It may be noted here that this Cuddalore project for which an MoU has been signed with Tri Sakthi, is different from the 1500 mw Cuddalore mega power project.