To avoid concentration of its business in capital-intensive power generation projects, Power Finance Corporation (PFC) is looking to fund projects in sectors along the chain including in distribution, power trading, fuel sources, transportation and capital equipment manufacturing.
At present, the Navratna infrastructure lender has 90.7 per cent of its total loans made to power generation, transmission, distribution, renovation and modernisation projects.
Addressing a press conference here on Tuesday, PK Singh, general manager, PFC, said these forward- and backward-linkages would help the company expand its base while minimising risk.
As part of the diversification strategy, the company would also focus more on independent transmission projects and private sector projects. “We are into three independent transmission projects already, which are needed to evacuate the power generated, and more are in the pipeline,” he said. It was considering taking the route of commercial banking to secure cheap funds for lending.
For 2011-12, the company’s MoU with the government would allow it to disburse a maximum of Rs 35,500 crore, according to D Ravi, executive director, PFC. It currently has 50 applications for funding with the total amount in the range of Rs 20,000-25,000 crore, he said. This is in addition to solar projects with a funding of Rs 15 crore and wind energy projects of Rs 600 crore.
On its exposure to and risk from state power utilities, Ravi said 17 utilities had been restructured and only four state electricity boards remained. Its exposure to these was Rs 3,751 crore in Chhattisgarh, Rs 2,851 crore in Jharkhand, Rs 247.6 crore in Bihar and Rs 5.8 crore in Kerala.
The company executives were in Hyderabad in connection with its ongoing follow-on public offer. The issue is open from May 9 to 13, and the price band has been fixed at Rs 193-203 per share.
