Rs 600crore Rib Funds For Power

The Industrial Development Bank of India (IDBI) has decided to earmark a major portion of the Rs 1,000 crore Resurgent India Bonds (RIB) proceeds placed with it by the State Bank of India to the power sector. At an internal meeting on Saturday, IDBI decided to disburse around Rs 600 crore to the power sector, Rs 200 crore to telecom and the rest to ports and roads.

"Among power projects, IDBI will give top priority to those to which the institution has already disbursed some funds," an official said. This includes four fast-track projects, Enron's Dabhol project (Phase II), GVK project in Andhra Pradesh and Spectrum's 208 MW project near Kakinada which have been already been commissioned and Hindujas' 1,040 MW project at Vishakhapatnam. IDBI has sanctioned loans for the Hinduja project but has not yet started disbursement. The PPN power project promoted by the Hyderabad-based Apollo group is also likely to be a recipient of RIB money. Funds to be brought in by the foreign partner in this project have been tied up, sources said.

Of the amount earmarked for telecom projects, the Tata project in Andhra Pradesh will get the major portion, he said. JT Mobile's project in the state is also on the shortlist. "The government's decision to extend the license tenure of non-metro cellular operators from 10 to 15 years will give additional comfort to lenders. However, a matter of concern in cellular projects is that the volumes are not materialising," he added.

Road projects under consideration are the Noida project, the Coimbatore bypass, the Ongole-Nellore project and the Mumbai-Pune expressway. Among port projects, captive ports would get top priority, he said.

"We are looking at disbursing these funds expeditiously, say, by the end of this month. Any remaining portion, too, will be disbursed latest by October," he added. SBI placed Rs 1,000 crore of the RIB proceeds with the IDBI at a coupon of 12.75 per cent. The bonds have a maturity of five years with no put and call options. IDBI is also talking to the other RIB collecting banks for issuing infrastructure bonds at a similar coupon.