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KSK Energy ties up $3.6 bln for Chhattisgarh power project

The sun sets behind electric pylons in the northern Indian city of Allahabad February 22, 2006. REUTERS/Jitendra Prakash/Files

MUMBAI (Reuters) - The Indian unit of London-based KSK Power Ventur PlcKSK.L has secured $3.6 billion in loans and equity for a 3,600 megawatt thermal power project in Chhattisgarh.

Shares in KSK Energy Ventures Ltd KSKE.BO, which has started civil work on the complex in Chhattisgarh, rose as much as 7.6 percent on Monday after the news, outperforming a broader market up 1.45 percent.

India is upgrading its power infrastructure with a planned addition of 100,000 MW of capacity during 2012-17, which would cost roughly 5 trillion rupees ($110 billion), to address a shortfall in supply. Domestic and overseas private sector firms are expected to play a major role in adding generating capacity.

KSK has appointed China’s Shandong Electric Power Construction Corp to design and build the project called, KSK Mahanadi, while Indian companies such as Punj Lloyd and Petron Engineering Construction have been offered sub-contracts.

Twenty-seven banks and institutions have offered $2.9 billion in loans, while state-run finance firm IFCI Ltd IFCI.BO has agreed to invest $56 million for a 7.7 percent stake in the project, the company said in a statement.

KSK Mahanadi has signed a bulk power transmission agreement with Power Grid Corp of India. The company did not say when the project would be completed.

The KSK Group, founded by two finance professionals S. Kishore and K.A. Sastry, has four small operational power plants in India with a combined capacity of 279 megawatts, and is working on three projects that would increase that to a combined 4,183 megawatts, which includes the KSK Mahanadi project.

(US$1 = 45.665 rupes)

(Reporting by Kaustubh Kulkarni and Ketan Bondre; Editing by Tony Munroe and Anshuman Daga)

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