REC in consortium with IIFCL, Hudco to fund power projects

REC in consortium with IIFCL, Hudco to fund power projects
PTI
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First Published: Tue, Feb 05 2008. 12 55 PM IST
Updated: Tue, Feb 05 2008. 12 55 PM IST
New Delhi: State-run Rural Electrification Corporation has entered into agreement with two other PSUs, IIFCL and Hudco, for lending funds to greenfield power projects of over 1,000 MW. The projects are proposed to be set up under public-private partnership.
Sources said the consortium would provide up to Rs4,000 crore to each project.
“The move is to ensure that REC is well positioned to provide speedy consortium refinancing for large power infrastructure projects,” they said.
The Power Ministry is believed to have asked REC and Power Finance Corporation to mobilise resources to ensure viable projects do not suffer for want of funds. The total fund requirement for the power sector has been assessed at around Rs10,00,000 crore for the 11th Plan.
India Infrastructure Finance Company Ltd (IIFCL) earlier said it has provided Rs1,800 crore loan to the Tata Group-promoted Mundra ultra mega power project.
The government targets to add 78,577 MW in the 11th five year plan to the existing installed capacity of over 1,30,000 MW. Of the over 78,000 MW, about 39,500 MW is required to be added by the Centre, while an additional 10,700 MW is expected to come from private players. States are likely to add 27,900 MW power in the 11th plan.
The Working Group on power for the 11th Plan based on certain government has estimated that the fund requirement for creation of projected capacity expansion alone will be about Rs4,10,000 crore.
REC, a lending institution to power sector, is likely to hit the capital market with an initial public offer to raise about Rs1,200 crore.
The company expects to raise 15.61 crore shares, including about 39 lakh shares reserved for the employees. REC proposes the issue would constitute an 18.18% stake of the company’s fully-diluted post-issue capital.
In FY07, the company made loan sanctions of over Rs32,925 crore and disbursements of Rs10,732 crore. As on 31 March, 2007, REC had total assets of Rs36,200 crore and net worth of Rs3,800 crore.
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First Published: Tue, Feb 05 2008. 12 55 PM IST
More Topics: Rec | Iifcl | Hudco | power | Fund |