Essar Power has tied up Rs 3,600 crore for its forthcoming 1,200 mw coal-based power project located at Salaya area of Gujarat state. A consortium of banks and financial institutions led by State Bank of India has agreed to lend the debt component for the proposed project involving an investment of Rs. 4,600 crore. Other members of the consortium include, IIFCL, ICICI Bank, Punjab National Bank, Allahabad bank and United Bank. The ICICI bank will lend around Rs 1,000 crore, while SBI will contribute around Rs 700 crore.

According to an official spokesperson of the company, with this transaction, Essar Power has arranged total debt of Rs 7,200 crore in the last two months. In July, it achieved financial closure for a similar capacity power project at Mahan in Madhya Pradesh. The Essar Power, which is a Ruia family conglomerate, through its power generation arm, planned a total investment of Rs. 20,000 crore to scale up its power generation capacity to 6,000 MW in three years. The entire project funding is in debt-equity proportion of 3:1 and the company will bring around Rs 5,000 crore as equity component. Currently, Essar Power has 1,200 mw and has been working on the four projects for the past two years and is negotiating with Chinese, European and US equipment suppliers and recruiting people for the projects located in states like Gujarat, MP and Jharkhand.