Power Finance Corporation (PFC) is keen on getting greater exposure by financing large private power projects.Over the next two to three months, it will be sanctioning loans to around 12 independent power producers with a cumulative generating capacity of 8,000-9,000 MW.Given that PFC's funding will be in the range of 20-30 per cent of the project cost, the corporation's estimated total exposure in these projects will be between Rs 6,000-7,000 crore."We have so far been funding independent power producing projects within the 450-500 MW range. But now we will be looking at even lead funding projects above 1000 MW capacity," Shyam Wadhera, director (projects), PFC, told Business Standard. Among the projects lined up are two each in Chhattisgarh and Karnataka and one each in Gujarat, Andhra Pradesh and Tamil Nadu.During 2003-04, PFC sanctioned about Rs 955 crore as loan to 15 private power projects. Earlier, addressing the media here on Saturday, PFC Chairman and Managing Director AA Khan said the integrated power projects (IPP) sector came under review at a recent meeting in Mumbai. Currently, IPPs account for only 5 per cent of PFC s disbursements, which stood at Rs 8,974 crore.Meanwhile, the two companies to be set up to manage the India Power Fund (IPF) launched in February would miss their registration scheduled for the end of this month, said R Krishnamoorthy, director (finance and financial operations). The registration of the IPF Trustee Co Ltd and IPF Asset Management Co Ltd will now be delayed by a month.The fund, under the aegis of PFC, is slated to raise a corpus of Rs 7,000 crore by 2012, to provide "last-leg equity" (capped at 33 per cent of the equity base or 10 per cent of the project cost) for future power projects. So far, PFC itself has committed Rs 200 crore to this corpus, while Punjab National Bank and Canara Bank have promised Rs 100 crore.The State Bank of India has also evinced interest and the power ministry has said a budgetary provision of Rs 1,000 crore would be made towards this end.Last week, PFC conducted roadshows to raise $100 million as external commercial borrowings (ECBs). The ECBs would be at the Libor (London Interbank Offering Rate) plus 90 basis points and some extra charges, Krishnamoorthy said.This will be part of the corporation's target to raise about Rs 8,000 crore in the current fiscal. The corporation has been turning to ECBs of late to bring down its cost of borrowings. Of the Rs 8,174 crore raised in 2003-04, $100 million was in yen-denominated ECB.PFC's current borrowings were at 6.5 per cent, Khan explained. However, it is still burdened by high-cost borrowings to the tune of Rs 6,000 crore and finds its average cost of borrowing at 9 per cent today.In its bid to access cheaper resources, PFC is looking at options to convert itself into an universal bank. It has commissioned investment banker Morgan Stanley to study the possibilities in this direction. PFC might be able to seek an exemption to skirt the sectoral cap that would be binding on an universal bank, Krishnamoorthy said.
