Hyderabad: Lanco Infratech Ltd on Monday said it will borrow $2 billion (around Rs.11,140 today) from China Development Bank (CDB), owned by the Chinese government, for developing two 1,320 megawatts (MW) power projects in Uttar Pradesh.

Lanco has signed a memorandum of understanding (MoU) with CDB for this.

Of the total $2 billion debt, CDB will contribute $600 million and syndicate the balance from Chinese banks and financial institutions, Lanco said.

“For the past couple of quarters, we have been working on strategies to address the liquidity concerns due to delay in receivables from utilities,” L. Madhusudhan Rao, chairman of Lanco group, said in a statement.

“Apart from this, we are also working closely with utilities so that receivables can come through, which is likely in the coming days. We are also in the process of addressing the debt-equity ratio at the same time,” he added.

CDB has already sanctioned $200 million in buyers’ credit for the Amarkantak 3 and 4, Babandh and Vidarbha power projects being developed by Lanco Group. The latest debt-raising is for Lanco’s Anpara Phase II and Himawat projects.

CDB is the largest Chinese development bank and a leading international lender, with total assets exceeding $1.1 trillion as of September. CDB has sanctioned over $7 billion to Indian corporations and has an outstanding amount of over $4.3 billion.

Lanco has an operating capacity of 4,740MW with another 4,636MW of coal, gas, hydro, solar and wind power projects under various stages of execution. The company aims to have an operating capacity of 13,000MW by 2015. It has an engineering, procurement and construction order book of Rs.28,500 crore.

Shares of Lanco rose 4.18% to end at Rs.12.70 on BSE on Monday, while the benchmark Sensex closed 0.16% higher at 18,537.01 points.

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