Oriana Power Limited has revised its proposed corporate guarantee in favour of State Bank of India (SBI) to cover the entire ₹460 crore working capital facility being availed by its subsidiary, Oriana Usolar Joint Venture Private Limited.
The company had earlier proposed to provide a corporate guarantee covering 74% of the facility. The Board has now revized the coverage to 100%, with the change subject to approval from the company’s shareholders.
The working capital facility is linked to the development of a 234 MW (AC) grid-connected floating solar photovoltaic (PV) project at the Damodar Valley Corporation (DVC) Maithon Dam Reservoir in Jharkhand. The project is being developed by Oriana Usolar, while DVC has awarded the EPC contract for the project.
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₹460 crore facility backs 234 MW floating solar project
The proposed guarantee will provide security for the ₹460 crore working capital facility being availed by Oriana Usolar for the floating solar project.
The project involves the development of a grid-tied floating solar PV plant at the Maithon Dam Reservoir in Jharkhand, with a planned capacity of 234 MW (AC). The EPC contract forms part of the project’s development and execution scope.
With the revized decision, Oriana Power will seek to support the full working capital facility rather than the 74% coverage proposed earlier.
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Guarantee to remain linked to facility tenure
The corporate guarantee will remain valid for the tenure of the working capital facility.
The facility has initially been provided for a period of 12 months, with the possibility of renewal on a yearly basis. The outstanding working capital facility will be repayable on demand. The revized guarantee will come into effect after shareholder approval. Until that approval is received, the revized guarantee will not take effect.
No immediate financial impact on Oriana Power
The company has stated that the proposed corporate guarantee does not have any immediate impact on Oriana Power.
At present, however, the guarantee is treated as a contingent liability for the company. Oriana Power has also stated that its promoter, promoter group and group companies have no interest in the transaction. The corporate guarantee is being issued on an arm’s-length basis.
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Floating solar project takes centre stage
The revized guarantee brings the financing requirements of the 234 MW floating solar project at DVC’s Maithon Dam Reservoir into focus.
The project is being taken forward through Oriana Usolar, with the ₹460 crore working capital facility intended to support its development. The proposed guarantee will cover the entire facility once the required shareholder approval is obtained.
The development marks a change in the level of financial support Oriana Power proposes to extend to its subsidiary, increasing the planned guarantee coverage from 74% to 100% of the ₹460 crore facility.
