PFC to raise Rs 22k cr from infra, tax-free bonds this fiscal | business | Hindustan Times
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PFC to raise Rs 22k cr from infra, tax-free bonds this fiscal

business Updated: Jul 18, 2011 15:27 IST
Power Finance

State-run lending agency Power Finance Corporation plans to raise over Rs 22,000 crore through infrastructure and tax-free bond issues during the current financial year (2011-12) to part fund its borrowing requirements.

"Our (borrowing) target for the current fiscal is Rs 30,000 crore, of which we have already raised Rs 3,400 crore from the follow-on offer, Rs 3,000 crore via bonds and Rs 1,000 crore from term loans," PFC chairman and managing director Satnam Singh told reporters.

PFC has received approval from the government to raise Rs 5,000 crore through tax-free bonds and Rs 7,000 crore through infrastructure bonds during the fiscal and the remaining Rs 11,000 crore may come from another bond issue or external commercial borrowings (ECBs).

The company's borrowing target in the previous fiscal (2010-11) was Rs 27,000 crore.

The company utilises these funds for lending to power projects.

PFC, which has so far allotted three independent transmission projects (ITPs) to successful bidders, will finalise two more such projects this financial year (2011-12).

"The special purpose vehicle (SPV) for one of the ITPs is in place and we have received 22 bids for that project," Singh said.

The first project to be awarded this year links Nagapattinum and Cuddalore in Tamil Nadu to Madhugiri in Karnataka and stretches 500 km, while the second is a 700-km-long link from Nagapattinum (Tamil Nadu) to Padghe (Maharashtra).

He said the second project is facing problems regarding its linkage with the generating station.

These independent transmission projects were envisaged on the lines of ultra-mega power projects (UMPPs) for encouraging private sector participation in the transmission sector, which is currently a monopoly of state-owned PowerGrid Corp.

Singh also said that PFC -- the nodal agency for UMPPs --would be able to invite initial bids for the Cheyyur project by September this year.