State-owned power financer, Rural Electrification Corporation
(REC) gave its largest loan ever of Rs 8,775 crore to NTPC
and Bihar State Electricity Electricity Board's power project.
“A loan agreement for Rs 8,775 crore in this regard has been signed on with Rural Electrification Corporation. The loan would be utilised for financing capital expenditure of Nabinagar Super Thermal Power Project, and is the largest loan facility extended by REC Ltd on standalone basis.,” NTPC said in a press release.
This loan from a single bank would cover the entire amount require to set-up the 1,980 megawatt power plant. Nabinagar Power Generation Company is a 50:50 joint venture between National Thermal Power Corporation and BSEB. The power project will be situated in Aurangabad district of Bihar.
The move is unique as a consortium of banks involving more than five banks, fund such large projects. REC, along with Power Finance Corporation (PFC) are non-banking finance companies owned by the government, and specialise in loans only to the power sector.
The loan has door-to-door tenure of 20 years having disbursement period of five years and is to be repaid in 15 years thereafter.