The group, which was planning to tie up the requisite foreign debt and equity for the project by July-end, hopes to achieve closure by October.

Group sources said that raising funds from international markets have become difficult owing to the recent downgrade of the country's sovereign rating by Moody's, and the consequent jump in forward premium and depreciation of the rupee.

The project has been envisaged on a debt-equity ratio of 2.5:1, with foreign equity comprising around 30 per cent of the total equity. While in-principle approvals of around Rs 1,000 crore have been received from domestic financial institutions, the foreign-debt portion constitutes around Rs 450 crore.

Group officials said the process of selecting an O&M contractor was on and the number of bidders have been shortlisted to two -- an Irish company and US-basedutility.

While the O&M contractor will pick up 10 or 15 per cent equity stake in the company, the RPG group will hold 35 per cent stake, and Siemens AG, the engineering-procurement-construction contractor, will hold 15.1 per cent stake.

It is learnt that ING Barings and Deutsche Morgan Grenfell, who along with three others were in the race for arranging the foreign debt portion, have been eliminated in the shortlisting process conducted by ANZ Grindlays, the financial advisors to the project. Kleinwort Benson and Banque Paribas have emerged as strong contenders for getting the mandate.

JP Morgan and I-Sec combine have already been appointed for arranging the foreign-equity portion. It is also learnt that "satisfactory discussions" have taken place with certain international investors.

While the role of legal advisors has been bagged by White & Case, insurance experts Alexander & Alexander, the Indian associates of American major Aon International, have been retained.

The Dholpur project wasinitially conceived as 750mw coal-fired project, but was later reworked into a 702mw naphtha-fired project. The project will also have a multi-fuel option.

A fuel-supply arrangement has already been signed with the Indian Oil Corporation for supply of 7.93 lakh tonnes of liquid-fuel annually. The project was also delayed somewhat owing to a tiff between the Industrial Development Bank of India (IDBI) and Industrial Credit and Investment Corporation of India (ICICI) on the issue of lien to an escrow account. The issue has, since then, been resolved.

While the Rajasthan state electricity board had given first lien on the escrow account to RPG Dholpur, IDBI, while part funding the project, insisted that the Dholpur and Chambal Power, another IPP being set up in the Rajasthan, share the escrow proceeds pari passu.

It is believed that IDBI had initially been appointed the lead institution for the project, but later, ICICI was given the mandate. ICICI and IDBI will have an exposure of Rs 600 crore and Rs 200crore in the Dholpur project.