Power Finance Corp Plans To Line Up Rs 16,000cr Loans

The public sector Power Finance Corporation of India (PFC) plans to mobilise Rs 16,000 crore through market borrowings during the current plan period, both from domestic and international markets.

The corporation will require about Rs 18,000 crore during the ninth plan period to expand its activities.

Towards this, about Rs 2,000 crore would come from the internal resources and rest from the borrowings, Power Finance Corporation director (finance) T N Thakur.

The corporation would target the international market to mop up a substantial amount through external commercial borrowings (ECB) and also approach the World Bank and the Asian Development Bank (adb) for the purpose, he said.

 

However, Power Finance Corporation sources indicated that the corporation had earlier planned to mobilise about Rs 11,000 crore through the ECB route.

The Power Finance Corporation has also submitted proposals for creidt from the World Bank and Asian Development Bank for $500 million each, they said.

While there are reports that World Bank is not keen to clear the $500 million loan sought for the restructuring of the state electricity boards (SEBs), the finance ministry has not cleared the proposal seeking Asian Development Bank loan for the same amount.

The Power Finance Corporation had sent the Asian Development Bank proposal early this year, and the power ministry is reported to have written to the finance ministry in January for expeditious clearance of the same.

Sources, however, clarified that the Asian Development Bank and World Bank proposals were now for a new line of credit and not to renegotiate the earlier ones.

The corporation has finalised a line of credit with IKB Deutche Industry Bank of Germany under which imports by power sector utilities in India can be financed by PFC.

By the year 2006-7, the Power Finance Corporation plans to enhance its lending portfolio from the present level of five per cent to 20 per cent of the total investment in the power sector.

As against a disbursement of Rs 1,500 crore expected in the terminal year of the eighth plan, it envisages to reach a disbursement level of Rs 5,000-6000 crore annually by the end of the ninth plan period and Rs 10,000-12,000 crore by the tenth plan.

In line with its recent decision to extend financial assistance to private power projects, the corporation sanctioned an Rs 47.50 crore to Bombay Suburban Electric Supply Company, the maiden loan sanctioned by the Power Finance Corporation to a private sector entity.