Russia to provide $3.4bn loan for nuclear project in India

The Department of Atomic Energy in India has entered into a financial agreement with Russian Federation to receive a $3.4bn credit facility for the construction of 1,000MW unit 3 and unit 4 at the Kudankulam Nuclear Power Project (KNPP) located in Koodankulam in Tamil Nadu.

The loan amount will be used towards financing the 85% of the value of works, supplies and services provided by the Russian organisations for the construction of the two units.

The protocol also has provision for $800m credit to fund up to 85% of nuclear fuel and control assemblies.

The interest on the loan is 4% per annum and the project credit is payable in 14 years, starting a year after commissioning the project where as the repayment period for the nuclear fuel credit is four years starting after two years of receipt.

The total cost of the project is INR320bn ($5.79bn) out of which INR170bn ($3bn) is expected to be covered from the Russian State credit facility.

Unit 1 of the KNPP is expected to be commissioned soon, followed by the commissioning of Unit 2 after a gap of seven months.