PFC asks NTPC to join fund

Power Finance Corporation Ltd (PFC) has sounded public sector power major NTPC Ltd for joining its proposed venture capital fund as a contributor. The venture fund, called India Power Fund, will invest in the equity of the green field power projects as seed capital.

PFC has initially targeted a Rs 1,000 crore corpus for the fund but this may go up if it gets a good response from the institutions.

The director (projects) of PFC, S Wadhera, said it had approached NTPC for the India Power Fund but nothing had been finalised yet.

PFC is also approaching leading banks, financial institutions and multilateral agencies to join as contributors.

PFC is contributing Rs 200 crore to the fund. Life Insurance Corporation has also agreed to join as a contributor.

"LIC has already agreed to contribute, but it is too early to comment on the quantum of the fund," he said.

According to him, the size of the investment in each power projects could be Rs 50-100 crore.

"We will not have a very big exposure in projects. The India Power Fund will also finance private power projects," he said.

Wadhera was in Kolkata for the forthcoming initial public offering of PFC through which the government is diluting its 10.22 per cent stake. The IPO will hit the market on January 31.

Describing PFC's role as a nodal agency for the ultra mega power projects, Wadhera added that it had floated eight special purpose vehicles for these projects. Each special purpose vehicle will have an equity of Rs 500,000. It will be used for obtaining ground level clearances.

"We shall hand over these special purpose vehicles to the successful bidders of these projects after realising the cost," he said.

The PFC director said one such special purpose vehicle, Jharkhand Integrated Power Ltd, had issued a notice for the development of the 2,932 Mw Jharkhand power project.

"The last date of submission of interest is January 31. We shall choose the bidder who offers lowest tariff," he said.