The Hindu Business Line : PowerGrid in talks for $3.6-b overseas loans

Mumbai, Jan. 9 Power Grid Corporation of India plans to tie up overseas loans of up to $3.6 billion (Rs 14,000 crore) this fiscal, according to its Chairman, Mr R.P. Singh. Additionally, the company will issue a $1-billion global tender this February for equipment for an 800 KV HVDC transmission line connecting the North-East to the western and northern regions, he said.

The tender will be on a supplier credit basis, Mr Singh said. Bidders will also arrange the financing, and bids will be evaluated not only on technical and cost parameters but also on terms of finance offered.

Of the overseas loans of $3.6 billion, the company expects to complete negotiations for a $600-million loan from the World Bank this month and shortly follow this up with negotiations for another $600 million with the Asian Development Bank. Another $400 million will be tied up later, said officials.

Loans of up to $1.6 billion will have sovereign guarantee. PowerGrid will also raise up to $2 billion, again from multilateral agencies, but without sovereign guarantee and on its own financial strength, said Mr Singh.

Capital expenditure

PowerGrid’s capital expenditure for 2008-09 is expected to be Rs 8,500 crore, and it hinges on the progress of generating projects, he said. The budgeted capital expenditure for the 11th Five-Year Plan is Rs 55,000 crore. The company expects to end the current fiscal with revenues of Rs 5,000 crore; net profit (Rs 1,229 crore in fiscal 2007) is likely to show a growth of between 20 per cent and 25 per cent over the previous year, said company officials.

Power Grid’s revenues from its telecommunication business grew to Rs 90 crore for the first nine months of the fiscal, from Rs 51 crore during the same period last year. The company plans to enter into the entertainment business, as well as the telecom tower, data centre and knowledge network businesses, said Mr Singh.

Although PowerGrid has been barred from participating in the proposed power exchange by the Central Electricity Regulatory Commission, it would try to convince the regulator to allow it to be a part of it. However, PowerGrid has agreed to provide data on transmission to the proposed exchange on the condition that it will be for a commercial consideration, he added.

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