The Hindu : Tamil Nadu / Chennai News : PFC to fund power utilities of two States

Online edition of India's National Newspaper
Wednesday, Dec 14, 2005

Tamil Nadu

Tamil Nadu - Chennai

PFC to fund power utilities of two States

T. Ramakrishnan

Under the scheme, it is ready to give 80 p.c. of the project cost Any generation project can qualify for `large loans' where the amount sanctioned is in the range of Rs. 700 crore to Rs. 1,000 crore.

CHENNAI: The Power Finance Corporation (PFC) has come forward to fund power utilities of Tamil Nadu and Karnataka under its new `large and mega loans' scheme.

Last week, the PFC made presentations before the Tamil Nadu Electricity Board and the Karnataka Power Transmission Corporation Limited for funding power generation, transmission and distribution schemes.

No outcome

Though no conclusive outcome emerged at the meeting, the two utilities are examining the PFC scheme.

Under the scheme, the Corporation is ready to fund 80 per cent of the project cost. Any generation project can qualify for `large loans' where the amount sanctioned is between Rs. 700 crore to Rs. 1,000 crore. For `mega loans' the amount sought should be more than Rs. 1,000 crore.

The interest rates are 8 per cent for the `mega loans' and 8.5 per cent for `large loans' for power utilities having AAA rating or States that have initiated the reform process.

The main condition is that power utilities should give a commitment to the PFC that it would take a minimum of Rs. 1,000 crore loan before March 31, 2007 for availing the concessions provided under `mega loans'.

In respect of `large loans' it should be Rs. 750 crore before the due date.

Opportunity

In Tamil Nadu, the Corporation is seeing an opportunity to fund the proposed 500 mega watt Kundah plant. In case the Electricity Board puts up one more thermal power plant in North Chennai, the PFC is ready to fund that too, says an official of the Corporation.

In Karnataka, the KPTCL, along with several distribution companies, plans to execute schemes to the tune of Rs. 2,700 crore in the next financial year.

In addition to the concessional rates of interest, the PFC will provide a discount of 0.5 per cent for timely completion of generation projects or drawing 80 per cent of the sanctioned amount for projects other than power generation. It will also give a concession of 0.25 per cent for timely repayment of instalments.

The repayment period offered by the PFC is 15 years for thermal projects and 20 years for hydro projects. The repayment period commences after the construction period, the official explains.

No decision

When contacted, B.L. Meena, managing director of the KPTCL, told The Hindu over phone: "As funds are available at cheaper rates [from other agencies] than those of the PFC, we have asked them to come up with still more attractive proposals."

A senior official of the TNEB said that no decision had so far been taken with regard to availing of the assistance package.

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