In its biggest-ever credit line, the Power Finance Corporation (PFC) will lend Rs 10,000 crore to the country's largest power producer, NTPC, for various projects to be completed in the current 11th Five-Year Plan.
According to officials, the MoU between the two PSUs is likely to be signed in the next one week and the money will be disbursed in instalments.
NTPC, which generates nearly 30,000 Mw, is aiming at a capacity of 50,000 Mw by 2012. It has lined up over Rs 13,200 crore capital expenditure in the current financial year and the PFC loan will be partly used for projects being undertaken in 2008-09. It reported capex of Rs 8,621 crore in 2007-08.
The power producer would double coal imports during the current fiscal to 5 million tonnes, while its overall consumption of the fuel during 2008-09 is expected to surge to 140 million tonnes. NTPC consumed about 124 million tonnes coal during 2007-08.
It has tied up loans worth Rs 21,809 crore for capacity expansion plans from various domestic banks and other financial institutions. Its cumulative domestic borrowing up to March 31, 2008, was Rs 20,739 crore, including Rs 4,000 crore worth of bonds placed with Life Insurance Corporation (LIC).
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"This tranche of loan of Rs 10,000 crore will be utilised by NTPC for the projects to be commissioned in the next four to five years," said a PFC official.
NTPC officials declined to comment saying discussions with various financial institutions for tying up finances was an ongoing process.
The company also holds equity in the power exchange promoted by NTPC, NHPC and Tata Consultancy Services.The maturity period of the loan is 10 years.
"We only have a small stake in the power exchange therefore we will go along with NTPC in the matter," he said.