PTC India Financial Services thermal energy exposure to go below 10%

PTC Financial Services, a non-banking finance company (NBFC), will see its exposure to stressed thermal power assets come down to nine per cent of its total loan book, with resolution of Jaypee’s Prayagraj power project reaching conclusion. The project was awarded to Resurgent Power, a joint venture of Tata Power and ICICI Ventures, under Insolvency & Bankruptcy Code (IBC) prccedings. The award got embroiled in a regulatory tussle with host state Uttar Pradesh over reducing of rates. The Appellate Tribunal for Electricity gave a favourable order last week, giving a green light to the purchase. PFS is one of the lenders to the project, as part of a SBI-led lenders’ consortium. The total of PFS’ exposure in the stressed account was Rs 329 crore. Pursuant to the Aptel order, PFS will get a one-time settlement payment of Rs 153 crore, said the firm.

PFS had provided for the balance exposure during 2018-19.

“This will reduce the exposure of PFS to the thermal power sector to nine per cent, from the current 13 per cent of our total loan book,” Pawan Singh, managing director, told Business Standard. Going down further to 7.5 per cent, he added, when debt resolution proceedings conclude for three more thermal assets.

PFS says it is shifting its focus towards renewable energy (RE), roads and transmission. For these three, it has started a new funding stream. “We lend to the main company, which in turn uses it to finance engineering procurement and construction (EPC) activities, till financial closure. We have stepped up business in these sectors through this mode. We have lent close to Rs 1,000 crore in the past six months,” said Singh.

In roads, it will fund annuity projects won by private entities. And, upcoming RE and transmission projects awarded to private companies via competitive bidding.

Union power minister R K Singh had earlier told this publication the government was looking at separate financing mechanisms for RE. These would focus on lending during the construction phase, when capital cost for such projects are highest.

PFS has also set up the country's first infrastructure development debt fund solely for RE. This has been done in a tie-up with UK Climate Investments and the British govrenment's department for international development. The company has also raised Rs 400 crore from SBI under the credit enhancement scheme, enabling it to raise bonds worth Rs 2,000 crore.