State-owned National Thermal Power Corporation has re-negotiated two of its big-ticket international borrowings totalling Rs 875 crore even before actually drawing down on the loan.
This has added savings of over Rs 32 crore in interest costs to the utility, which has saved over Rs 150 crore by refinancing loans over the last 4 years.
According to top officials in NTPC, the power utility has resettled a French franc 444 million loan for its Kawas project in Gujarat.
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The loan agreement, scheduled to be signed on October 18, was to carry an interest rate of 9.2 per cent. BNP Paribas, which has agreed to provide the 3.5-year, Rs 298.51 crore (rupee equivalent) loan, has agreed to reduce the interest rate to just above 5 per cent. NTPC officials said this would save Rs 23.8 crore in interest costs to the power utility.
Similarly, the corporation has prepaid US $ 120 million (Rs 576.98 crore) loan which originally carried an interest rate of 7.21 per cent.
The drawdown date for the loan taken from State Bank of India, New York was September 24. SBI, New York has, however, now agreed to refinance the 2.5-year $ 120 million loan at a lower rate of 5.99 per cent resulting in savings of Rs 8.42 crore to NTPC.
NTPC officials said that the state-owned company has now renegotiated almost all the foreign loans taken so far. In the last fiscal, the corporation had pre-paid a 5 billion Japanese Yen loan from Sumitomo resulting in savings of Rs 8.42 crore.
During the last four years, the power utility has negotiated loans to the tune of US $ 680 million or approximately Rs 2,872 crore in rupee equivalent as on the date of drawdown. Officials said that this has resulted in savings to the corporation of Rs 187 crore.