Lanco Mandakini Hydro Energy Pvt Ltd

About the Company :

Lanco Mandakini Hydro Energy Pvt Ltd is setting up a 76 MW hydel power plant across river Mandakini in Uttarakhand with an investment of Rs. 5200 million.

The project cost was estimated at Rs. 520 Cr, to be funded out of Debt and Equity component of Rs. 416 Cr and Rs. 104 Cr respectively. The project closure was achieved with sanction of the Term Loan by a consortium of 6 banks led by Axis Bank, and the construction started in August 2009, to be completed in 3 years. Due to various modifications in the project design, the cost was revised upwards to Rs. 772 Cr in May 2013, with the debt component going up to Rs. 592 Cr and COD was shifted to September 2014.

However, due to the devastating floods in the State of Uttarakhand flood in June 2013, the project has suffered severe damages. The company has estimated a total compensation of Rs. 160 Crs to be provided by the insurance provider (United India Insurance Co. Ltd) for the damages suffered. The insurance company is assessing the claim and the company has received an initial payment of Rs. 25 Crs. On account of the damages caused by the flood and reconstruction to be done, increasing administrative costs and Interest During Construction (IDC), the project cost had to be revised multiple times, and as per latest figures accepted by the lenders, the revised project cost is Rs. 1132.84 Crs to be funded by a debt of Rs. 872.29 Crs and remaining by equity.

The COD was again proposed to be postponed to September 2017. The lenders have also availed a special dispensation from RBI to postpone the COD & repayment schedule by one year without treating it as Restructuring. Lead Bank has approved the postponement of COD & repayment schedule and has sanctioned their share of cost overrun. The other lenders are in the process of doing the same.