In a major boost for the Telangana government's plans to create new power generation capacity, Power Finance Corporation has agreed to extend Rs 4,009-crore financial assistance to the fifth phase of the Yadadri Ultra Mega Thermal Power Plant.

Following this move, the 4000 MW Yadadri power plant has achieved financial closure for the entire plant, that is it has tied up 100 per cent funds required for the completion of the project.

Rajiv Sharma, Chairman and Managing Director of Power Finance Corporation, on Friday handed over a letter to TS Genco CMD D. Prabhakar Rao at Vidyut Soudha, agreeing to finance the fifth phase of the project.

The Yadadri Power Plant is being set up in Damaracherla with five units of 800 MWs, with supercritical technology.

Funding of about Rs 16,950 crore needed for the first four plants has been agreed to by the Rural Electrification Corporation (REC).

Now, Power Finance Corporation has agreed to fund the fifth unit. With this fresh loan commitment, Power Finance Corporation would have extended funding of Rs 28,210 crore to TS Transco, Genco and discoms.

The corporation has so far extended a total amount of Rs 16,156 crore to the state power utilities.

While thanking the PFC for its continued support to the state, Prabhakar Rao said the Yadadri Power Plant would be crucial for irrigation projects, supply of 24x7 quality power to the farm sector and to enhance power generation based on needs that would arise in future.

All the necessary permissions for this mega project are now in place and the required finances tied up for the construction of the project.

State Chief Minister K Chandrashekhar Rao is keen that works on the Yadadri Power Plant are expedited.