Power Finance Corp to raise Rs 11,429 cr in 2006-07

Loan assistance for 12 upcoming power generation projects in seven states.

Power Finance Corporation plans to disburse Rs 11,429 crore in 2006-07 as loan assistance for a dozen upcoming power generation projects in seven states. This marks a 1.47 per cent drop in loan disbursal by the finance company.

The company plans to raise the amount from bonds, foreign markets, external commercial borrowing and internal resources.

"The total cost of these projects is Rs 18,219 crore. The maximum loan amount of Rs 3,200 crore will be sanctioned to Madhya Pradesh Power Generation Company Ltd," an official told Business Standard.

"Madhya Pradesh Power Generation Company Ltd will be using the loan amount to set up two units of 500 Mw each at the Purni plant in Malwa," the official added.

While eight of the dozen projects identified for loan assistance are thermal power plants, the rest are hydroelectric plants.

PFC had an equity base of Rs 1,030.45 crore at the end of March 2005 and reserves and surplus of Rs 5,350 crore.

The company's upcoming IPO is expected to raise up to Rs 1,500 crore. The government will ride piggyback on the PFC IPO to divest its five per cent stake.