Power Finance Net Up 3-Fold To Rs 218 Crore

Lending rates slashed by 200 basis points

The Power Finance Corporation (PFC) has registered a more than a three-fold increase in its net profit for the first half of the 1997-98. The corporations net profit for the period stood at Rs 218 crore compared with Rs 60 crore for the previous year.

PFC has recorded a doubling of income for the same time period when its income increased from Rs 257 cr to Rs 501 crore. The corporation has declared an interim dividend of Rs 15 crore.

PFC has cut its lending rates by 200 basis points for power generation projects and transmission lines above 132 kv.

As per the revised structure, term loan for thermal generation schemes of public sector utilities would bear an interest rate of 16 per cent as against 18 per cent earlier; 15 per cent (compared to 17 per cent) for transmission schemes above 132 kv and generation schemes other than thermal projects.

A decision to reduce interest rates both for public and private sector utilities as well as working capital loans was taken at an emergency board meeting of the corporation on Friday in the wake of liberalised busy season credit policy of the Reserve Bank of India.

PFC also offered loans to the public utilities for schemes other than thermal generation at 9.5 per cent under the direct foreign currency loan along with foreign exchange risks and in case of thermal projects the interest rate offered is at 10 per cent, PFC sources said yesterday.

Term loan under pre-investment fund (World Bank loan) would carry an interest of 11 per cent as against 15 per cent, sources said.

The corporation also effected a sizeable cut in lending rates for the working capital requirements ranging between two to three per cent.

Loans for working capital will bear interest rates of 14, 14.5 and 15 per cent respectively for the periods up to 30 days, between 30 to 60 days and between 60 to 90 days, as against earlier rates of 16, 17 and 18 per cent.

Term loans to private sector will now onwards bear interest rate of 17 per cent for thermal generation projects as against earlier 19 per cent, 15.5 per cent (against 18 per cent) for transmission schemes above 132 kv and interest of 15 per cent (against 17 per cent) for schemes under renovation and modernisation (R&M) and urban distribution.

Private sector would also be offered direct foreign currency loans bearing foreign exchange risks at 11 per cent for thermal generation projects and at 10.5 per cent for other schemes, corporation sources said.

The corporation, which is targeting mobilisation of Rs 1,000 crore in the remaining part of the current financial year through debt markets including Rs 500 crore from external commercial borrowings, had recently announced a four per cent subsidy for identified R&M and accelerated generation projects. The revised lending rates would be effective from October 1.