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Enron raises $ 1 billion abroad for Dabhol

The Enron Corporation has succeeded in raising $ 1 billion from commercial banks abroad for the completion of the second phase of the 1,444 mega-watt power project at Dabhol in Maharashtra.

Significantly, this amount was garnered from the Export-Import Banks of Japan and Belgium as the Export-Import Bank of America cancelled the letters-of-credit already issued in the aftermath of the nuclear tests conducted by India. The development is expected to end the financial uncertainty over the project.

It also acquires significance as it comes close on the heels of the downgrading of India's sovereign rating by international credit rating agencies.

According to company sources, the phase-II needs $ 1.4 billion, of which $ 1 billion has been raised from international commercial banks.

Interestingly, Japan, that made noises after the Pokhran tests, has chipped in with $ 500 million through the Export-Import bank of Japan. The Export-Import Bank of Belgium pitched in with another $ 200 million. The remaining rupee component of $ 300 million will be contributed by Indian financial institutions like the Industrial Development Bank of India.

The first phase will be completed by December 1998 and the second phase by end-2001, according to Enron's new chief executive officer Joseph Sutton who has replaced the colourful Rebecca Mark.

Sutton admitted that the power generated from phase-I will be costly as it uses naptha as fuel. However, he assured that the project cost and the cost of power per unit will come down substantially as the second phase will use much cheaper natural gas (to be imported from Qatar) as fuel.

Compiled from the Marathi media by Prasanna D Zore.