3 govt bodies to raise Rs 854cr

Andhra cabinet okays to stand as guarantor

The state cabinet today decided to provide guarantee for Rs 854-crore proposed to be raised through loans and bonds by three government entities, including APTransco.

The Andhra Pradesh Housing Board has proposed to borrow Rs 170 crore from banks for funding the ongoing housing scheme for weaker sections, which is estimated to cost about Rs 4,595 crore.

The Central Power Distribution Company has sought government guarantee for Rs 384.29 crore of the Rs 1,280 crore it plans to borrow from the Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) for implementing various schemes, including high voltage distribution system (HVDS).

The APTransco too plans to raise Rs 300 crore through Vidyut bonds this year. This is part of the government's commitment to allow APTransco to raise Rs 975 crore in four years in tranches starting from 2005-06.

While the APTransco bonds would carry a coupon rate ranging from 8.7 per cent to 8.95 per cent, the rate of interest on the loan to be raised by the housing corporation is expected to vary from 8.72 per cent to 9.5 per cent.

While the total loan requirement for the housing programme in the first installment was pegged at Rs 1,210 crore, which is entirely proposed to be raised from banks, the finance department, however, has reduced the loan proposal to just Rs 170 crore, keeping in view the overall borrowing limit allowed this year under the Fiscal Responsibility Act.

According to an official note, the borrowing limit for the current year is Rs 8,147 crore.