The $85 million loan has four tranches, a $20 million external commercial borrowing, $16 million advance out of foreign currency non-resident (B) deposits, Rs 16 crore rupee term loan and another Rs 45 crore standby facility.

The foreign currency loans have been priced at Libor plus 275 basis points for the construction stage and at Libor plus 300 basis points post-construction. The rupee terms loans are priced at 200 basis points over the prime lending rate of the partcipating banks, and are repayable in 15 equal semi-annual instalments with a morotorium period of 18 months.

Syndication of the FCNR-B loan component of $16 million is the first such instance in a project finance transactions, ANZ Investment cliamed in a press release issued on Thursday. Participating bankshave the option of converting The FCNR-B loan to a rupee-loan at the end of three or five years. This structuring will help banks gaurd against asset-liabilty mismatch given that FCNR-B deposits are of short maturity.

Larsen & Toubro holds a 74 per cent stake in HPLCL and the rest with HPL. HPLCL is being set up at a cost of Rs 510 crore and will be operationalised within two months.