PFC to raise $4 bn for funding projects

Power Finance Corporation (PFC) plans to raise $4 billion (about Rs 16,000 crore) in 2008-09 for funding power projects in the country.

"PFC is open to raise $4 billion from the domestic as well as the overseas markets. However, we will go for overseas borrowing if the interest rates are cheaper at lower risk," VK Garg, chairman, PFC, said.

He pointed out that raising fund from the domestic market is safer for funding power projects as there is no currency risk involved and the borrower is also aware of the liabilities and interest rates.

During April-December 2007, PFC raised Rs 9,000 crore and expects to raise another Rs 4,000 crore by March.

It sanctioned a loan of Rs 46,000 crore in the same period and the figure is set to reach Rs 50,000 crore by the end of the current financial year.

Its disbursements in April-December 2007 stood at Rs 11,500 crore and the amount is likely to go up to Rs 20,000 crore by March and to $6 billion (Rs 24,000 crore) in 2008-09.

PFC is keen on facilitating the flow of private equity into power projects, but Garg clarified that it will not be taking any stake in a $12 billion fund floated by a US-based private equity firm for funding power projects.

"PFC plans to start its advisory service soon for bringing private equity investment in the power sector. The objective is to ensure that the power sector gets good proposals and worthy investors. PFC will offer its services to asset management companies and its role will be that of a matchmaker," Garg said.

The functioning of the PFC advisory services will be akin to that of an investment bank.

Garg was in the city to sign an MoA (memorandum of agreement) on behalf of PFC with West Bengal Green Energy Development Corporation (WBGEDC) for funding a 2 mw grid-connected solar photovoltaic (PV) power plant at the Dishergarh power station complex in Asansol.

The Dishergarh project is a pilot project and its success willl spur PFC to fund other solar power projects in the country.

The PFC chairman is scheduled to meet the Orissa chief secretary tomorrow for sorting out issues of land acquisition and availability of water for the proposed 4,000 mw Sundergarh ultra mega power project.