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Power giants look within India for funds

business Updated: Mar 26, 2009 23:28 IST
Anupama Airy
Anupama Airy
Hindustan Times
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State-owned hydro-power generation firm NHPC Ltd is tying up a majority of its Rs 21,000 crore capital expenditure requirements for the 11th plan projects by way of domestic borrowings, shunning overseas avenues amid a global financial downturn.

Other companies like NTPC, too, are in talks with domestic funding agencies like the State Bank of India for raising Rs 8,300 crore to fund its debt requirement of Rs 11,000 crore for the next fiscal. Reliance Power is also said to be looking for domestic funds.

NHPC has lined up 12 projects totalling 5,320 megawatts for implementation during the current five-year plan (2007-08 to 2011-12).

Not a single dollar was raised by the company to meet its capex requirement of Rs 3,400 crore during 2008-09. Even for 2009-10, the company is meeting its Rs 5,100 crore capital expenditure by tying up loans from the domestic banks and financial institutions.

Speaking to the Hindustan Times, the chairman and managing director, NHPC, SK Garg said the cost of borrowings in the overseas market was very high with even multilateral agencies offering increased rates. “We have no plans for foreign borrowings,” he said. “I am not averse to foreign funding but when we can raise funds at cheaper rates from the domestic markets, it makes no sense to look at foreign funds.”

He said NHPC has already tied up a Rs 6,500 crore line of credit from LIC and another Rs 4,000 crore from Power Finance Corporation. For the remaining fund requirement, NHPC is in talks with other domestic banks and FIs, he said.