Giving a fillip to cash-starved Power Generation Corporation of Andhra Pradesh Ltd (AP Genco), the Rural Electrification Corporation has agreed to extend a loan of Rs 10,873 crore for three power projects in the state.
REC and AP Genco signed a memorandum of understanding to this effect in the presence of Chief Minister N Kiran Kumar Reddy late yesterday evening, according to a press release from the CMO.
The three projects are: 800 MW new unit at Dr Narla Tata Rao Thermal Power Station (Vijayawada), a 800 MW unit at Kothagudem Thermal Power Station (stage-VII) and 12x80 MW units at Polavaram Hydro Electric Project.
While the aggregate estimated expenditure for these projects is Rs 13,591.69 crore, the state government and AP Genco will bear Rs 2,718 crore as equity, while the balance will come as loan from REC, the release said.
REC Chairman and Managing Director Rajeev Sharma discussed the loan proposals with the Chief Minister before signing the MoU.
REC has agreed to give a rebate of 0.5% on the applicable rate of interest as a special case for the above three projects, the release added.
AP Genco now hopes to increase its power generation capacity from 8,925 MW to 15,000 MW by 2015 by setting up new projects and expanding and modernising the existing ones.
Meanwhile, official sources in AP Genco said the Rs 2,700 crore loan that the REC agreed to extend for the first phase (700 MW) of gas-based power project in Karimnagar district has been kept on hold as the project remained a non-starter due to non-availability of gas.
"Exactly two years ago, the REC agreed to extend the Rs 2,700 crore loan for Karimnagar power project but the project itself is in doldrums. So we haven't taken the loan," a Genco official said.