Manila-based Asian Development Bank on Thursday approved a loan of $300 million (nearly Rs 1,380 crore) to state-owned power major NTPC to finance its power generation capacity expansion programme.
"Piloted by the Private Sector Operations Department of ADB, the Bank's own share of this loan to NTPC will be $75 million while the remaining $225 million will be provided by private commercial banks under complementary financing scheme," India's representative in ADB Ashok Saikia said.
The loan will be the bank's first such lending to a state-owned enterprise without a government guarantee under the Bank's Innovation and Efficiency Initiative (IEI) through pilot financing instruments, ADB said in a statement.
The loan will help fund capital expenditure for two projects -- the Sipat Super Thermal Power Plant in Bilaspur, Chhattisgarh and the Kahalgaon Super Thermal Power Plant Stage II Project in Bhagalpur, Bihar.
Together, these two projects will add 4,480 MW of electricity to the national grid between 2006 and 2009.
India has a large power supply deficit and the government has set an ambitious target of providing Power for All by 2012, which would require additional capacity of nearly 1,00,000 MW by 2012.
Formerly known as National Thermal Power Corporation Limited, NTPC is owned 89.5 per cent by the Government of India, having listed 10.5 per cent of its shares on stock exchanges in 2004.
NTPC is classified as a 'Navratna' (a cash-rich) company, meaning it may run its operations independently and raise commercial financing without explicit government nod.