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Power Finance Corporation Ltd (PFC) on Friday said it has decided to lend Rs 19,000 crore to six financially sick state electricity distribution companies (Discoms).
“We have provided assistance to fill the cash gap of some utilities. We have already sanctioned roughly Rs 19,000 crore of loans. Of this, disbursements of around Rs 5,000 crore have been done,” Satnam Singh, Chairman and Managing Director of PFC said.
The State utilities subscribing to these loans include Punjab (Rs 1,000 crore); Haryana (Rs 4,300 crore); Uttar Pradesh (Rs 1,800 crore); Rajasthan (Rs 4,500 crore); Tamil Nadu (Rs 5,000 crore) and Andhra Pradesh (Rs 3,000 crore).
The loans offered by PFC are separate from the Discom re-structuring package unveiled by the Government. The package is open till December 30, wherein the utilities can apply to re-cast their bad loans.
Till now, Jharkhand and Haryana have written to the Power Ministry to participate in the Discom re-structuring programme, Power Secretary P. Uma Shankar told Business Line .
Singh added that many of the stakeholders expected non-performing assets (NPAs) in the power sector would go up. But the Government move would reduce NPAs.
There have been no NPAs in this quarter for PFC, he said.
BORROWINGS
PFC has set a borrowing target of Rs 40,000 crore for 2012-13. Of this, it has already mopped up Rs 18,000 crore.
The financial institution (FI) dedicated to the power sector would raise $250 million through the external commercial borrowing (ECB) route and would issue tax-free bonds for Rs 5,000 crore.
At the same time, PFC has conducted road-shows to raise about $500-700 million through a medium-term note (MTN) programme. It has listed its MTN on the Singapore bourse.
“The cost of borrowing has started coming down. Our observation is that the international market has already come down. We have gone ahead and borrowed ECB loans and done street shows for the MTN programme,” Singh added.
PRIVATE EQUITY FUND
After several months of discussions, PFC has selected Tata Capital to float its $1-billion private equity fund. The joint venture would be launched in the next two months, Singh said.
The fund will have start-up capital of $300 million to be utilised for funding power projects. PFC will hold 49 per cent in the fund, while the partner will have 51 per cent stake.
OVERSEAS FUNDING
In the first overseas funding by PFC, it has offered a loan of Rs 2,200 crore to Videocon Industries for its Mozambique natural gas project.
PFC has offered the loan on condition that a majority of the output from the Mozambique project should facilitate electricity generation in India.
However, Videocon has not announced any plans for importing gas to India from its Mozambique project.
UMPP
On November 5, the Ministry of Environment and Forests (MoEF) gave the terms of reference for setting up a second UMPP in Deogarh, Jharkhand.
PFC is awaiting notification of Standard Bidding Documents (SBDs) by the Power Ministry to issue request for quotation (RFQ) for the Cheyyur UMPP in Tamil Nadu.
Once the SBD is notified, the proposed UMPPs at Orissa and Tamil Nadu would move ahead. However, The Chattisgarh project is yet to be cleared from a no-go area, Singh said.
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