PFC plans to raise Rs 9500 cr, to tap market in June

Power Finance Corporation (PFC) targets to raise Rs 9,500 crore in the current financial year to assist companies setting up power projects.

Power Finance Corporation chairman and managing director Arvind Jadhav said, "It is exciting times for the sector. The companies are over-booked and inventories are running full. There are issues revolving around resources."

He said that 10 per cent of the amount being raised will be from the overseas market. It raised Rs 8,900 crore last year while the loans sanctioned was Rs 18,000 crore. The company expects to exceed the target this year.

Power Finance Corporation also plans to tap the capital markets in June this year. The company expects to raise over Rs 2,000 crore, which will be deployed for financing of projects in generation, distribution and transmission.

The company has sought the permission from the Union government to add 10 per cent to its existing equity. Its current equity base is Rs 1,300 crore.

'Power generation hampered by fuel supply constraints'

Meanwhile, Union power minister P M Sayeed has said that the ministry is taking steps to tackle coal and gas shortages which, in turn, creates power shortage. The initiatives include setting up of coal fields.

He said that the adding power generation capacity, distribution reforms and rural electrification are the topmost priority of the government.

"My ministry has planned for an addition of one lakh mw generation capacity with the objective of 'Power for all by 2012'," he said.

The power sector failed to generate 18 billion units of electricity due to gas and coal shortages in 2003-04. Of this, nearly 15 billion units shortage was due to unavailability of gas and remaining three billion due to coal shortage. Gas shortages lead to a reduced plant load factor of 58 per cent last year.

He added that the sector is on target to meet the target of adding 41,000 mw of generation capacity in the 10th Five Year Plan.

Out of this, 37,000 mw addition has already been achieved and the remaining target is expected to be achieved in the next two years. Financial closure for 11 projects with a capacity of 4,000 mw has taken place.

There are 11 more projects with a capacity of 11,000 mw under way. The projects are being closely evaluated by the lenders. The total investment envisaged for the 15,000 mw generation is estimated to be around Rs 60,000 crore.

Sayeed added that the government has recently launched Rajiv Gandhi Vidyutikaran Yojana with the objective of completing household electrification in the next five years. This programme involves providing electricity to 7.8 crore rural households.

Under the scheme, the Center will provide 90 per cent of the capital cost as grant for creating rural electricity distribution backbone, village electrification infrastructure with at least one distribution transformer in each village and decentralised distribution generation system where grid supply is not feasible or cost effective.