The special purpose vehicle for the project, Teesta Urja (TUL) formed by Singapore-based Asian Genco, the Sikkim Government, Power Trading (PTC) and Athena Projects made the fresh and final call on all the stake holders in May for infusing an additional equity of R615 crore on account of delays.
Varuna Investments, the holding company for PE investors, which has invested nearly R1,200 crore in the project through Asian Genco, fears that its investment is under threat. Varuna has written to the power minister urging him to give specific directions to both the Sikkim government, which holds a 26% stake in the project, and PTC that they should reconsider their decision with regard to equity infusion as delay at this stage would lead to uncertainty in meeting completion timelines.
The PE investors in the Teesta-III project include US-based Morgan Stanley Infrastructure Partners, General Atlantic, Goldman Sachs Asset Management, Everstone Capital and Norwest Venture Partners and UKs Ashmore Investment Management.
The project has already been delayed and thus suffered cost overruns due to various reasons like earth quakes and landslides.The stakeholders had infused R900 crore in 2012 given delays and consequent cost overruns.
Rural Electrification (REC) is the lead lender to the project with current exposure of R3,034 crore.
Power Grid Corporation (PGCIL) is a 26% JV partner with TUL for installation of 400 KB transmission lines. Power Finance Corporation (PFC) has loaned R530 crore to the Sikkim government to meet the latters equity investment in TUL.
Teesta-lll is expected to make Sikkim self-sufficient in electricity, enabling it to be a net power exporter. About 12%-15% of Teesta-III power will be available free of cost to the state. About 70% of the rest will be transmitted to power-starved States of Delhi, UP, Haryana and Rajasthan, while the balance will be sold on spot basis.