The Hindu Business Line : CESC in talks to raise funds for Budge Budge project

WHILE clearance of Central Pollution Control Board is still awaited, CESC Ltd is holding negotiations for lining up a Rs 700-crore credit for the proposed 250MW third unit at Budge Budge power station.

The company is also expecting to arrange most of the Rs 300-crore equity participation in the project through internal accruals.

With a marked improvement in the bottom line during this fiscal, CESC has dropped the plan for dividing the company into two corporate entities, one for generation and the other for distribution. Talking to newspersons, the company's Managing Director, Mr Sumantra Banerjee, said that the company's debt-equity ratio has come down below the 1:2 level.

"Unbundling of generation and transmission was not mandatory for private sector utilities. However we were considering the issue to clear the balance sheet. Now that the company is getting stronger we need not think on these lines." Mr Banerjee was attending a ceremony to launch the CESC-ICICI co-branded credit cards. Stating that the company was waiting the environmental clearance, he said that with emerging growth prospects, funds would not be an issue. "We are hopeful of raising the maximum of the equity participation in the project through internal accruals".

Earlier, launching the co-branded card, Ms Kalpana Morparia, Deputy Managing Director of ICICI Bank Ltd, said that CESC was the first power utility to have co-branded any credit card in the country. Incidentally, almost 60 per cent of ICICI Bank's credit card business is done through co-branded cards.

While ICICI Bank is looking at roping in the two million customers of CESC under its fold, the CESC Vice-Chairman, Mr Sanjiv Goenka, described the initiative as a step towards digital transaction and reducing the cost of bill collection. CESC collects an average of over Rs 240 crore every month as payment against the energy bills.

To tap utility sector: ICICI Bank is looking to tap the potential of the utility sector to increase its card business. Having already launched co-branded cards with mobile telephone companies, ICICI is now negotiating with a number of utility providers. Mr. V Vaidyanathan, head of ICICI credit cards division, said that over 12 per cent personal consumption expenditure in the country was on account of utility services.