The Uttar Pradesh State Electricity Board has mobilised Rs 1,400 crore for fresh capital investment. Most of the fund has come from the Life Insurance Corporation of India (LIC).
According to the agreement between the SEB and the LIC, the latter has agreed to release funds for five years to the SEB. This is the state's allocation which the LIC has to invest in the state.
A broad-based agreement has been reached for release of funds of five years. These, cumulative allocation are of Rs 1,095 crore. Of these, the funds of the first two years, viz Rs 195 crore and Rs 225 crore, will be released immediately and the rest of Rs 225 crore each will be released in the fiscal 98-99, 1999-2000 and 2000-2001. The state government will release Rs 273.75 crore, making for a total funding of Rs 1368.75 crore.
This amount is for the establishment of Maneri Bhali II, which will be completed in three years.
All future receipts LIC will be invested in revenue earning ventures; and lastly, immediate investments will be made in transmission so that once the plant is complete there is no problem in evacuating power from it.
UP state will immediately release funds of Rs 266.80 cr lying in the public ledger account and it will constitute a high level Task Force to oversee implementation of the project and shall meet once in three months to review the progress of work.
The outstanding interest payable to the LIC by the UP will now of Rs 308.39 cr will now be repaid in 84 instalments at 14 per cent interest. Compound interest of Rs 153.27 cr will be converted into interest free loan payable in 84 instalments, with repayments beginning after three years.
Crucial to the settlement is that the project, Maneri Bhali II of 304 MW installed capacity should be completed in three years and repayments start immediately, thereafter. If UP can do it then it would have reestablished its credibility with the FIs'.
