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ESSAR Power, part of the Ruia family conglomerate, has tied up Rs 3,600 crore for its forthcoming 1,200 mw coal-based power project at Salaya in Gujarat. According to people connected with the fund tie-up, a consortium of banks and financial institutions led by State Bank of India has agreed to lend the debt component of the proposed Rs 4,800 crore project.

   Other members of the consortium include, IIFCL, ICICI Bank, Punjab National Bank, Allahabad Bank and United Bank. “ICICI Bank will lend around Rs 1,000 crore, while SBI will extend around Rs 700 crore,” a banking industry executive said.

   With this current 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 Ruias, through their power generation arm, planned a total investment of Rs 20,000 crore to scale up the 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 in around Rs 5,000 crore as equity component, a company executive had said.

   Currently, Essar Power has 1,200 mw and has been working on the four projects for the past two years, negotiating with Chinese, European and US equipment suppliers and recruiting people for the projects. It is working on the projects in Gujarat, MP and Jharkhand.

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