The Hindu : Tamil Nadu News : REC to fund debt requirement of power project

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Thursday, May 22, 2008
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Tamil Nadu

Tamil Nadu

REC to fund debt requirement of power project

Special Correspondent

CHENNAI: The Rural Electrification Corporation (REC) on Tuesday agreed to finance the entire debt requirement of the 1,600-MW, super-critical thermal power project being established by the Tamil Nadu Electricity Board and BHEL at Udangudi in Tuticorin. To be implemented during the Eleventh Plan, the Rs. 8,500-crore project would get carbon credit under the clean development mechanism, besides the mega power project status.

The other joint ventures which the REC will finance this year are the NTPC-TNEB Energy Company Ltd (NTECL) set up for the implementation of the 500-MW thermal power project (stage-II) at Vallur in North Chennai at a cost of Rs. 2,577 crore (the REC loan component is Rs. 1,804 crore) and the NLC-TNEB venture that will execute a 1,000-MW thermal power project, at a cost of Rs. 4,909 crore, in Tuticorin.

For the NTECL first stage of 2x500 MW, the REC sanctioned the entire debt requirement of Rs. 3,796 crore during 2007-2008, and the TNEB has agreed to withdraw Rs. 700 crore during this fiscal. In the second project, the NLC has an equity stake of 89 per cent and the TNEB 11 per cent. The REC will fund the loan component of 70 per cent.

At its annual works programme meeting for the State for 2008-2009, the REC has agreed to sanction Rs. 3,000 crore for transmission and distribution schemes. Of this, it will disburse Rs.950 crore to the TNEB this year. It has also agreed to disburse Rs. 400 crore out of Rs. 2,175 crore for the implementation of its 600-MW thermal power project (stage-II, unit-II) at North Chennai.

TNEB chairman S. Machendranathan and REC chairman and managing director P. Uma Shankar chaired the meeting held on Tuesday.

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