New Delhi: Anil Ambani-led Reliance Power has started the process of arranging funds for its 4,000 MW ultra mega power project at Tilaiya in Jharkhand.

Reliance Power has received in-principle approval from the RBI for raising external commercial borrowings (ECB) of USD 2 billion and the financial closure process for the project has been initiated and it is expected that it would be financed at a debt to equity ratio of 75:25.

The power and coal mine put together are estimated to cost around Rs 24,000 crore (USD 5 billion).

Asked whether there was any delay in procuring land at the project site, company officials said, "majority of land required for the construction of the power plant has already been acquired. The environment clearance for the power plant has also been obtained."

Water required for the power plant has been allocated by the government from the Tilaiya reservoir which is located at a distance of about 4 kms from the power plant.

As per the Power Purchase Agreement (PPA), the first unit is scheduled to be commissioned in May, 2015 and the entire project by May, 2017, they added.

Tilaiya Ultra Mega Power Project (UMPP) is a pit-head power project and has been allocated two captive coal mine blocks – Kerandari B and C – having reserves of almost 1.3 billion tonnes.

According to the company, plans for development of these mines have been prepared and are under approval by the government. The mine plan envisages production of almost 40 million tonnes of coal per annum.

The power generated from this project will be supplied to 18 procurers from 10 states of northern and eastern India at a levelised tariff of Rs 1.77/kWh (Kilo Watt Hour).

Tilaiya UMPP is 3,960 MW (6 super-critical units of 660 MW each) power project at Hazaribagh district, Jharkhand. It is the third UMPP in Reliance Power's portfolio. The project is being developed by Jharkhand Integrated Power Limited which is a wholly owned subsidiary of the company. The power project is expected to start generating power from the year 2015.

The project was awarded for development to the company through a competitive bidding process and transferred to the company in August, 2009.

Given the scale of the project and the clearances for land, environment, water, forest etc required to be undertaken by the government, some of these approvals are being obtained after the project transfer, the officials explained.

Reliance Power is also developing two more such projects at Sasan (Madhya Pradesh) and Krishnapatnam (Andhra Pradesh).

(Agencies)