Jindal Power is reported to have secured an offshore loan of about $470 million for a power project in Botswana, but the financing has not been publicly confirmed by the company or the three Indian lenders named in the report.
The Hindu BusinessLine, citing a Bloomberg report, said the nine-year door-to-door facility was provided by Axis Bank, ICICI Bank and the Export-Import Bank of India. The report attributed the information to people familiar with the matter who asked not to be identified because the details were private.
The reported loan is expected to support Jindal Power’s expansion in Botswana, where the company has built a 700-megawatt coal-fired power plant. According to information on Jindal Power’s website cited in the report, the plant is scheduled for commissioning next month. The report did not provide a public loan agreement or an official commissioning notice.
The facility is being syndicated, with some global institutional lenders expected to join, according to the people cited. Its pricing was reported at about 300 to 325 basis points over the benchmark Secured Overnight Financing Rate. The borrowing cost is expected to decline after the project is commissioned, the sources said.
Representatives of Jindal Power, Axis Bank, ICICI Bank and the Export-Import Bank of India did not respond to requests for comment, according to the report. That leaves the reported size, terms and lender participation subject to official confirmation.
The proposed project is linked to Botswana’s broader effort to expand domestic electricity generation and make greater use of its coal resources. Mining operations in the country are significant electricity consumers, while Botswana has been seeking to develop a petroleum fuels industry and reduce its dependence on imports from South Africa and Namibia, the report said.
The financing would also extend Jindal Power’s overseas expansion. The company reportedly raised about $500 million in an earlier financing round in February for international growth. The latest reported facility would add to the exposure of Indian lenders to an African power project whose revenues are expected to be denominated in, or linked to, foreign currency. This could provide what the report described as a natural hedge against exchange-rate movements.
The broader foreign-currency borrowing environment remains relevant to the transaction. Data compiled by Bloomberg showed that Indian borrowers raised $24.2 billion through foreign-currency loans during the year, about 8 per cent lower than a year earlier. Elevated hedging costs have discouraged some companies from accessing overseas debt markets, according to the report.
The reported Botswana loan therefore combines project-finance, cross-border lending and energy-infrastructure considerations. Its final structure, lender participation and commissioning status will need to be established through an official company, lender or project disclosure.
