APGenco gets Rs 9,506 cr loan from PFC, REC

The Andhra Pradesh Power Generation Corporation (APGenco) will get Rs 9,506 crore financial assistance for two of its projects from the Power Finance Corporation (PFC) and Rural Electrification Corporation (RFC).

The PFC has sanctioned an advance loan amount of Rs 6,806 crore for setting up the 2x800 Mw coal-based Vadarevu Thermal Power Project (Phase-I) in Prakasam district. The total cost of the project is estimated at Rs 8,507.60 crore. A memorandum of understanding in this regard will be executed shortly.

Similarly, REC has sanctioned Rs 2,700 crore loan for development of the 700-Mw Karimnagar Gas-based Power Plant (Phase-I). While the PFC has reduced the rate of interest from 10.75 per cent to 10.50 per cent on its loan, the interest rate on REC’s loan is 25 basis points less than other bonds.

According to an official press release here on Tuesday, this is the first time that a state-owned power generation company has been sanctioned such a huge loan and that too at a very reasonable interest.

This apart, cordial relations and effective bargaining are stated to have resulted in a saving of around Rs 70 crore on Rs 3,558 crore sanctioned as loans by various banks at a reduced interest rate of 10 per cent. Prudent financial management ensured APGenco to earn an additional Rs 15 crore by way of short-term deposits with banks, apart from the interest savings on cash credit.

Boost capacity
The two projects, when completed, will boost the state power generation by 2,300 Mw. At present, the total installed generating capacity of APGenco stands at 8,087.90 Mw. Of this, 4,382.50 Mw is thermal and 3,703.40 Mw is hydel. Wind power comprises just 2 Mw.

Chief minister K Rosaiah urged the corporation officials to make use of this financial assistance and complete all projects on time. He assured all assistance from the state government in this regard.

The chief minister expressed satisfaction that APGenco has been earning profits for the last six years. The corporation earned a profit of  Rs 52 crore, Rs 63 crore,  Rs 151 crore,  Rs 198 crore, Rs 246 crore and Rs 89 crore respectively in the last six years. Rosaiah wanted the power utility to further improve its performance.

APGenco officials informed Rosaiah that the corporation achieved 100 per cent financial closure for all the projects entrusted to it. The execution of the projects, estimated to cost Rs 16,700 crore, will result in a capacity addition of 3,437 Mw.

The officials also told the chief minister that the PFC had reduced its interest rate from 11.5 per cent to 11 per cent as a special case on Rs 5,660 crore loan sanctioned to RTPP Stage III, VTPS Stage IV, KTPP and KTPS Stage VI resulting in a saving of Rs 225 crore.