New Delhi: Tata Power said on Tuesday it has refinanced 3,864 crore loans for its 4,000-MW Mundra ultra mega power project (UMPP) in Gujarat which will help the plant save around 77 crore a year in interest cost.

The Mundra project is being implemented by Coastal Gujarat Power (CGPL), a wholly-owned subsidiary of Tata Power.

“Coastal Gujarat Power Ltd, a 100 per cent subsidiary of the company, has refinanced its outstanding rupee loans. The refinancing has been done under RBI circular dated 7th August 2014 by which a minimum of 25 per cent of the outstanding loans has to be refinanced through new lenders," the company said in a filing to BSE.

“The refinancing scheme will help in extending the tenure of the rupee facility and also help in reducing the interest cost of CGPL. The total interest savings will be 2 per cent (approx. 77 crore per annum) on 3,864 crore of refinancing," it added.

The loan agreement was executed on Monday, it said. Axis Bank has joined as a new lender to the existing rupee lenders consortium, pursuant to the refinancing exercise, in line with the regulations, the filing said.

The consortium is led by State Bank of India. Other banks are India Infrastructure Finance Company Ltd, Oriental Bank of Commerce, Vijaya Bank, State Bank of Hyderabad, State Bank of Bikaner, State Bank of Travancore and Axis Bank.

Tata Power had said earlier that it was in discussion with a lenders’ consortium to refinance loans by extending the tenure of loan repayments to Mundra UMPP.

Media reports had earlier said that Tata Power is close to tying up a refinancing facility under the 5/25 scheme for 10,000 crore that it borrowed to set up the Mundra UMPP. Under the 5/25 scheme, banks can extend loan repayment for a period up to 25 years, with an option of refinancing the loan every five years.

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