PFC, Tata cap form $1-bn equity fund for power | business | Hindustan Times
Today in New Delhi, India
Jan 21, 2017-Saturday
New Delhi
  • Humidity
  • Wind

PFC, Tata cap form $1-bn equity fund for power

business Updated: Dec 12, 2012 21:30 IST
HT Correspondent
HT Correspondent
Hindustan Times
Highlight Story

State-run Power Finance Corporation (PFC) said on Wednesday that it would set up a $1 billion (about Rs 5,500 crore) private equity (PE) fund in a joint venture with Tata Capital for investing in private power projects.

Tata Capital will hold 51% equity in the JV, and PFC 49%. The fund is targeting an initial corpus of $1 billion, a PFC official said, adding that power sector projects need huge investments in the form equity apart from debt.

"We have selected Tata Capital as our joint venture partner for setting up a PE which they would be having 51% stake and PFC 49%," PFC director finance R Nagarajan said.

"PFC is in the process of finalising the JV terms. The fund is expected to become operational over six-nine months," Nagarajan said.

The power sector lender is providing funds for fuel sources like coal mine, coal transportation facility, and laying of gas pipelines, so as to widen the choice of fuel sources.

As per 12th Five-Year Plan projections, the Centre is targeting investments to the tune of Rs 45 lakh crore in the infrastructure sector, of which R14 lakh crore is expected to be in the power sector.

PFC's target for sanctions in 2012-13 stood at Rs 45,140 crore, of which it has sanctioned Rs 41,732 crore.