Reliance-Power to tap ECA route for nuclear energy

MUMBAI : Reliance Power plans to explore options through the export credit route to finance its planned foray into nuclear power generation once the government clears all decks to allow private players to enter the space.

“There are different models for financing of such projects and ECA financing is one of them. We’ve never resorted to multi-lateral lending in any we’ll use the ECA route,” said a senior executive who heads the company’s planned foray into nuclear energy generation. Usual sources of financing such as multilateral lending are difficult for nuclear projects.

Reliance Power is looking at a nuclear power portfolio of 6,000 megawatts to 8,000 megawatts, once the government amends the Atomic Energy Act and allows private players. The process, many say, would take not less than seven years to complete.

The typical benefits from ECA financing is that the model has long maturity with low cost of borrowing. The Anil Ambani firm has been working on the nuclear power “blueprint” for the past four years and has also held talks with Westinghouse, Areva and Russian firms, said the executive.

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The recent waiver for India from a 34-year-old ban on accessing global nuclear fuel is expected to bring an investment of about $27 bn to the country.

The executive said the company has a team in place for the nuclear foray. “Apart from the work on nuclear energy generation, we are looking at services such as building reactors and related areas and have built a dedicated team for this purpose,” he added.

There is much excitement over the prospects of the nuclear space, which is, however, likely to take off only after seven years.

“We are underrating the timescale. While the prospects are likely to have a major impact, it will take time as there are a host of issues which need to be resolved first,” a senior executive with a global consulting firm said, adding companies also need to have bilateral agreements with the US or France or Russia before starting the work.

Companies have been waiting for the government to amend the Atomic Energy Act to bring in private players. An amendment would allow private companies to invest and help generate about 2000MW by 2020.

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