Russian loan for TN nuclear plant

The Russain government will provide soft-term credit at four per cent interest for phases III to VI of the Kudankulam nuclear power project in Tamil Nadu, identical to that extended for phases I and II. The terms of reference were discussed during Prime Minister Manmohan Singh’s visit.  Nuclear Power Corporation chairman and managing director S K Jain told Business Standard: " The terms and conditions are very attractive. Repayment will have to be made after commercial operation, in 14 equal instalments. Revenue earned by the station will be large enough to service the short-term credit. It is a unique arrangement."
He said for units I and II, with total capacity of 2,000 Mw, the credit would cover expenses of all services and supplies from Russia. The short-term credit covers 85 per cent of the total money requirement for funding the project. This would be applicable to other units, too. However, the level of localisation would change the ratio of foreign currency loans and the Indian rupee component. "The negotiations for unit III and IV are currently underway and will be finalised in the next three months,” he said.

He said the short-term credit would also be available for purchase of fuel for the initial charge and subsequent charging up to five reloads. "So far, NPC has invested Rs 14,000 crore for construction of units I and II. The project cost will increase by another Rs 1,500 crore due to the stoppage of work since mid-October, following agitation by the villagers. The capex comes to Rs 7.5-8 crore per Mw and the per unit tariff (power supply rate) comes to Rs 2.60," Jain added.

He said NPC was losing Rs 5 crore per month towards establishment cost and it had to bear an additional burden of Rs 8 crore per month towards interest payment following stoppage of work since mid-October.