NTPC to get Rs 25,000 cr for capacity addition

State-run NTPC says banks will provide long-term loans of Rs 25,000 crore to fund its expansion plans to generate 128,000 Mw by 2032.

NTPC Chairman and Managing Director RS Sharma told Business Standard, “The company is scouting continuously for opportunities for raising debt and it is an ongoing activity. In a recently-concluded bankers meet, banks were willing to extend loans of Rs 25,000 crore for longer maturities of four plus 10 years. These funds would be utilised for projects in the pipeline.”

Sharma said NTPC had already got committment for loans of Rs 25,287 crore of which Rs 1,050 crore has been drawn in 2010-11 and the rest will be taken over the next two years. For 2010-11, the total outlay is Rs 22,350 crore of which Rs 12,818 crore is required as debt. The company hopes to add 15,760 Mw by the end of 11th Plan period. By the end of the 12th Plan period, NTPC is expected to have an installed capacity of more than 75,000 Mw, By 2032 it will have a capacity of 128,000 Mw.

Sharma said NTPC has decided to finance new projects through a 70:30 debt equity ratio. “Internal accruals are sufficient to finance the equity portion of scheduled investment in NTPC, while deployment of equity in subsidiaries and joint ventures would be done preferably with control retention.”

He said the company has attained the “most favoured borrower status due to low gearing and healthy coverage ratios and debt servicing ability to remain strong due to certainty of revenues based on cost plus regime”. According to Sharma, NTPC has cash and cash equivalents of Rs 14,460 crore as on March 31, 2010, compared to Rs 16,272 crore as on March 31, 2009, and Rs 14,933 crore as on March 31, 2008.