India’s biggest private power company, Tata Power (TPC) has made announcement about the successful completion of the financial formalities of its 4,000-mw ultra mega power project (UMPP) at Mundra in Gujarat.

The project, which will cost around Rs 17,000 crore, will be set up under the company’s special purpose vehicle (SPV), Coastal Gujarat Power (CGPL).

The company said that the first of the five units of the project is likely to be commissioned in September 2011, while the entire project is expected to be commissioned by end-FY 12.

The 4,000 MW Mundra UMPP comprises of equity of Rs 4,250 crore, external commercial borrowings (ECB) of around $1.8 billion (about Rs 7,200 crore) and rupee loans of up to Rs 5,550 crore.

SBI Caps are the financial advisors and mandated lead arranger for rupee loans.

Prasad R Menon, Tata Power managing director said, “The signing of the financing agreements for Mundra UMPP is an important milestone. The terms of debt financing provides us long tenure of loans, supporting our competitive bid price assumptions.”

The 4,000 Mw Mundra UMPP is the first of the UMPPs, which heralds the entry of super critical boiler technology in India for the first time. The project consists of 5 units, each of 800 Mw which will produce saleable power of 3,800 Mw to be supplied to five states namely Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.