Ap To Set Up Finance Firm For Power Sector

A finance company, exclusively to fund the power sector, is to be set up by the Andhra Pradesh government with an equity of Rs 3,000 crore.

This decision was taken by the state cabinet at its meaeting here yesterday.

The proposed company, A P Power Finance Corporation Ltd, will be a government company incorporated as a public limited company.

The revenue minister, P Ashok Gajapathi Raju, briefing mediapersons after the cabinet meeting, said the state government will have to extend a net cash support of Rs 6,190 crore over a four year period to the Andhra Pradesh Power Transmission Corporation (Aptransco). The proposed company would raise the necessary funds for this purpose.

 

Raju did not elaborate on how the company would raise funds, but said a committee under the chairmanship of the principal secretary in the finance department "will identify streams of income for the company". The government of India will provide counter guarantee for the bonds issued by the company. A sinking fund will be created to provide for redemption of bonds, he added.

Initially, the company will have four directors _ the principal secretary, finance, the principal secretary, energy, the CMD, Aptransco and the CMD, AP Generation Corporation.

Raju said the Cabinet also approved the following government guarantees and sanction of loans:

l Rs 2,100 crore for repayment of principal and interest amount on due date in respect of the Aptransco Vidyut Bonds;

l Rs 138 crore as an equity to Aptransco by way of adjustment of power purchase dues payable by Aptransco to Apgenco, coal dues payable by Apgenco to the Singareni Collieries Company Ltd and royalty dues payable by the Singareni Collieries Company to the state government;

l Rs 100 crore to Apgenco for obtaining a loan from the Power Finance Corporation Ltd for completion of on-going Srisailam Left Bank Hydro Station Pumped Storage scheme;

l Rs 100 crore for availment by the Aptransco of loan under direct discounting scheme from the IDBI;

l Loan of Rs 196 crore to Aptransco to meet half yearly interest payment to the subscribers of the current series of the Vidyut Bonds;

l Rs 50 crore to the state Bank of Hyderabad for availment of cash credit limits by Apgenco;

l Rs 20 crore each to the State Bank of Mysore and the Development Credit Bank Ltd for availment of cash credit limits by Apgenco; and

l Rs 6.40 crore to Power Finance Corporation Ltd for the loan to Apgenco for Y2K compliance of computers in power plants and upgradation of obsolete MIS computer system.