PFC working on loan package for NPC's capacity addition

The state-run Power Finance Corporation (PFC) is working on a package to provide long-term loan to the proposed capacity addition of 2,800 Mw in Gujarat and Rajasthan by the Nuclear Power Corporation (NPC).

The capacity addition, based on domestic reactors at Kakrapar in Gujarat (700x2) and Rajasthan (700x2), entail a total investment of Rs 23,000 crore, of which NPC would contribute 30 per cent towards equity and 70 per cent debt will be raised from domestic banks and financial institutions.

PFC chairman and Managing Director Satnam Singh said, "PFC has already inked memorandum of understanding (MoU) with NPC and is keen to provide loan. However, PFC needs more time to work things out as the plant life is 40 years. In case of reactors to be supplied by Areva, what we learnt it that the plant life for their reactors is expected to be 60 years. Therefore, PFC will have to relook into the loan package."

On the other hand, NPC director (finance) J K Ghai confirmed they have sent a formal loan request to PFC for the Gujarat and Rajasthan projects. He, however, said discussions were underway and there has been no formal decision.

"Certainly, PFC is one of the financiers for NPC's capacity addition. Since the signing of MoU we have been interacting, but it is yet to reach a conclusion. NPC will procure funds from domestic and external sources. The decision to take loan from PFC will depend on the rate at which it lends. PFC generally sanctions loan, but ultimately NPC will take a call on how much it will avail from it," said Ghai.

On debt requirement for the Jaitapur (10,000 Mw) and Mithi Virdhi (Gujarat, 2,000 Mw) projects, based on reactors supplied by the French and American companies, Ghai said NPC has discussed its requirement with PFC.

However, he clarified that no formal request has been forwarded to PFC in this regard as discussion with American companies GE-Hitachi and Westinghouse were still in progress. NPC has been negotiating with French banks and institutions for Jaitapur project.