SBI Capital Markets (SBI Caps) has slashed the escrow capacity of the Uttar Pradesh State Electricity Board (UPSEB) by 15.63 per cent following objections raised by financial institutions.
The escrowable capacity of the board has been pared to 1225 mega watt from 1452 mega watt for the year 2004-05.
SBI Caps, the merchant banking arm of the State Bank of India, has been commissioned by the Uttar Pradesh government to estimate the escrowable capacity.
At the core of the dispute was the projected power requirements. "Financial institutions basically asked questions about the projected growth rate in the demand for power. They also questioned the debt obligations of UPSEB," said Ananda Mukerji, general manager, ICICI.
SBI Caps officials refused to comment on the issue saying, "it is not our policy to comment on such issues". SBI Caps had earlier arrived at the escrow capacity of 1452 maga watt using the projections of the 15th Economic Power Survey (EPS).
The survey had projected that the demand for power in Uttar Pradesh will grow at a compounded annual growth rate (CAGR) of about 7.81 per cent.
Institutions took the line that this will have to be reviewed in the light of the projections by the 16 EPS which is underway.
The 16th EPS has projected that national power requirements will fall by 10 per cent to 700 billion units by the end of the 10th Plan as against the 15th EPS's estimate of 781.86 billion units. SBI Caps then came up with a revised estimate of 1390 maga watt based on a CAGR of about 7 per cent.
This figure was
