MANGALORE, India, Sept. 20, 2000–Tanir Bavi Power Co. has achieved financial closure for a 220 MW power plant to be located on a barge south of Mangalore in the state of Karnataka.

In addition, Tanir Bavi Power Co. has set an aggressive target to begin commercial operations by midyear, 2001, since the construction activities had been initiated prior to financial close.

Tanir Bavi Power Co. is a joint venture between PSEG Global (US) – 49 percent and GMR Group and Associates (India)-51 percent. A joint venture of PSEG Global and GMR Group will operate the plant for the project company. The barge is being assembled by Hyundai in Korea and will then be shipped to the Mangalore Coast. The plant, which is expected to cost $207 million, will run LM-6000 gas turbines in a combined cycle fueled by naphtha.

The plant has a power purchase agreement with the Karnataka State Electricity Board and escrow support from the Karnataka Power Transmission Corp. Ltd. The total project cost of $207 million is financed by equity of 30 percent amounting to $62 million and debt of 70 percent amounting to $145 million.

The debt is comprised of foreign currency borrowings of $124 million and rupee borrowings equivalent to $21 million with the dollar debt funded by IDBI, Canara Bank and Bank of India and the Rupee funding by Industrial finance Corp. of India.