The Union Coal Ministry has in a letter to Reliance Power and the Madhya Pradesh government communicated its dissent in granting permission to assign mining lease of Moher and Moher Amlohri Extension coal blocks as security to lenders of the Sasan project, officials have been quoted as saying by the paper.
The Government has declined Anil Ambani-led Reliance Power’s request to let it mortgage coal blocks attached to Sasan Ultra Mega Power Project (UMPP) in Madhya Pradesh to lenders (including banks from the US, China and Singapore), reports a financial newspaper.
The mining leases for the blocks were executed between the state and Reliance Power in September 2011.
The Coal Ministry has told Reliance Power and the MP government that there is no provision for such mortgage in the contract documents and the power purchase agreement (PPA) for the Sasan project.
The view was taken by the Coal Ministry after months of deliberations with the Law and Power ministries, a senior government official told the daily.
In its representations to the Government and through the MP government, Reliance Power had told the Centre that mortgage was a prerequisite for the INR 14,500-crore debt that the company took from a consortium of 14 banks led by State Bank of India (SBI) in April 2009.
US Exim, Bank of China, China Development Bank and The Export Import Bank of China along with Standard Chartered Bank have refinanced part of this loan.