Responding to green commitment from Reliance Anil Ambani group, the U.S. Export and Import Bank on Thursday gave a preliminary approval for $600 million in loan guarantees to the supplier for the Rs. 20,000 crore power project at Sasan in Madhya Pradesh.
The proposed estimated Rs. 2,800 crore loan guarantee will support the sale and export by U.S. firm Bucyrus International.
The approval would result in saving about a 1,000 jobs in the U.S. Jobs are believed to have been behind Exim Bank’s reversal of earlier decision of rejecting the arrangement.
“This transaction was also made possible because of Anil Ambani’s leadership and vision in diversifying Reliance Power’s production portfolio of energy projects in India,” Exim bank Chairman and President Fred P. Hochberg said in a statement soon after a Board meeting.
Commenting on the development, Bucyrus International President and CEO Tim Sullivan said: “We are confident that the remaining steps of this process, including financial review, will be completed expeditiously in order to allow Reliance Power to proceed with its project plan.”
The Exim Bank reversed its earlier decision and approved the financing arrangement after Reliance Power committed to cap the emission from the about 4,000 mw project to 850 grams of CO2 per kilowatt hour.
Besides, the firm also agreed to develop a 250 MW renewable energy facility in India.
“We are pleased that Reliance is making this commitment to renewable energy, which allows us to sustain U.S. jobs and promote both conventional and renewable energy exports,” said Mr. Hochberg.
The Bank said the Board of Directors has approved a full financial, technical and environmental review of an application by Reliance Power for financing its coal-fired power plant.
Reliance Power’s application is, however, still subject to final review and approval, it said.
On the other hand, Mr. Sullivan said: “On behalf of all the employees of Bucyrus, we would like to praise the U.S. Exim Bank for approving the environmental aspects of the Reliance Power Project application, which will allow us to provide mining equipment to the Indian project moving forward.”
This is the first step in the process to provide financing, which will create nearly 1,000 jobs across 13 states in the U.S., as indicated by a study conducted by the Metropolitan Milwaukee Association of Commerce, he added.