The Hindu Business Line : Implementation of major projects — North-east power corpn to raise Rs 2,500 cr

NORTH Eastern Electric Power Corporation Ltd (NEEPCO), on its way to implementing a string of major projects, has proposed to raise at least Rs 2,500 crore from the market to fund its expansion.

The company, which has lined up three large projects covering various States in the North-East region, will soon start looking at ways to mobilise resources. It also expects to enlarge its equity base. The three projects are likely to be okayed by the Cabinet.

NEEPCO, a 100 per cent Government-owned undertaking, plans to significantly add to its production capacity, courtesy a mega Rs 5,000-crore project and a smaller Rs 2,500-crore project, which will produce 1,500-MW and 600-MW of power, respectively. Added to these will be a gas turbine project in Tripura, to be set up for over Rs 900 crore.

The company, which currently has an installed capacity of 1,130 MW, accounts for half of the installed capacity in the region, said Mr M.R. Ghosh, Director (Finance).

"We are looking at expansion possibilities, backed by a serious debt restructuring programme", he stated, adding that the company expects to repay high-cost loans.

NEEPCO, which hopes to record a decent profit this fiscal, is in dialogue with banks for bringing about the desired changes in its debt profile.

Banks pledge Rs 800-cr term loan

ON Wednesday, a consortium of 13 banks, led by Punjab National Bank, committed a structured term loan aggregating Rs 800 crore to NEEPCO.

The consortium included some of SBI's associates as well as lenders such as Bank of Baroda, Canara Bank, UCO Bank and United Bank of India.

Structured by SBI Capital Markets, the 10-year loan, backed by power bonds receivables, comes to NEEPCO at 6.33 per cent interest.

This, Mr Ghosh said, is the first major commercial borrowing for the company, aimed at reducing its cost of funds.

"We expect to save around Rs 30 crore annually", he told presspersons.

The transaction, according to Mr Indrajit Gupta, Managing Director & Chief Executive Office of SBI Caps, will provide a strong boost to the development of power sector in the remote north-eastern region.

"We have structured the deal so as to enable the future receivables of interest and redemptions of the power bonds, to be used by NEEPCO to raise loans.

"The idea is to make use of the friendly interest rate scenario", he observed.