Core sector financing major Power Finance Corporation (PFC) is gearing up to meet the government's ambitious goal of 'Power to all by 2012' and is all set to establish a Rs 200-crore special purpose vehicle (SPV) in the tax haven of Mauritius.
"PFC is in the process of getting the Reserve Bank of India's nod for an initial corpus of Rs 200 crore to set up the SPV," a senior power ministry official told the
The special purpose vehicle would fund government-owned power utilities that would procure power equipment from abroad. The finance ministry, according to the official, has written to the Reserve Bank of India (RBI) to provide the initial corpus of Rs 200 crore to PFC to kick-start the SPV.
The RBI, which has foreign exchange reserves of Rs 27,100 crore (as per RBI data), is planning to invest Rs 200 crore in the Indian power generation and utility sector, the official said.
"The SPV is being launched at the behest of the Prime Minister's Office at it is worried about the huge gap in funding required for the power sector and also to meet the target of 'Power For All by 2012'. The country would need an estimated Rs 8,00,000 crore to meet its energy requirements," the official said, adding that PFC has also received approval for more funds from multilateral lending agencies, including the Asian Development Bank.
It is also awaiting approval of the KfW Development Bank of Germany. The agency finances investments and advisory services in developing countries.
The Reserve Bank's board has given in-principle approval for the SPV to borrow funds from the RBI and lend to Indian companies implementing infrastructure projects in India, or to co-finance their external commercial borrowings for such projects solely for expenditure outside India.