Are new power plants the answer to India's energy woes?

Reliance Power to Raise $4 Billion to Fund Projects

Reliance Power Ltd., the energy company that completed India's biggest initial public offering this year, plans to borrow $4 billion overseas to fund two generation projects.
The unit of India's third-largest utility, owned by billionaire Anil Ambani, got approval from the central bank to raise the funds in two tranches, Mumbai-based Reliance Power said in an e-mailed statement.
Reliance is in talks with overseas banks including China Development Bank, HSBC Holdings Plc and Standard Chartered Plc for the first loan for a 4,000-megawatt, coal-fired plant at Sasan in central India, Jayarama Chalasani, chief executive officer, said in a telephone interview from Mumbai.
The loan would be the second-largest by an Indian company this year. Tata Motors Ltd., the Indian automaker that bought Ford Motor Co.'s Jaguar and Land Rover units, obtained a $3 billion bridge loan from banks for 15 months, leading to a rating downgrade by Moody's Investors Service and Standard & Poor's.
Reliance plans to borrow 80 percent of the 200 billion rupees ($5 billion) it needs to fund the Sasan project, Chalasani said. Indian banks led by State Bank of India, the nation's biggest by assets, will lend the remainder, he said. All funding for the Sasan project will be completed by September, he said.
Another $2 billion will be raised overseas to build a similar-sized project at Krishnapatnam in southern India.
Reliance Power plans to build 28,200 megawatts of capacity, roughly a third of India's planned generation, over the next five years. The company currently generates 941 megawatts.

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