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New Delhi: State-run Power Grid Corporation is likely to get $400 million (over Rs1,980 crore) funding from the International Finance Corp (IFC) for undertaking electricity transmission projects in the country.

The entity, part of World Bank group, focuses on lending to entities in developing countries.

IFC would put up the $400 million funding proposal before its board on 3 May.

“The total project cost is estimated to be $2.3-3.5 billion over the next 12 months... IFC financing of upto $400 million is expected to finance approximately 15% of the project cost on corporate finance basis," IFC said in its ‘Summary of Proposed Investment’.

Power Grid Corporation of India Ltd (PGCIL) is expected to fund 70% of the projects’ cost through debt while the remaining 30% will be from internal accruals.

“The proceeds from IFC is intended for financing transmission projects to be undertaken by Power Grid and shall not be used for EPC (Engineering, Procurement and Construction) consulting and/or O&M (Operations & Maintenance) services and/or joint-venture projects," IFC said.

Balance of the debt would be raised from multilateral lenders “namely World Bank and ADB and through issuance of domestic bonds".

Apart from this loan, Power Grid has also asked for IFC’s support to enter other markets.

“Power Grid is also seeking engagement with IFC to increase their participation in other emerging markets. They would like to take up projects in Asia and Africa to expand their footprint and support from IFC will help them enter these markets," the summary noted.

The public sector major already has board approvals for investments worth about Rs70,000 crore related to 12th Plan Period (2012-17) projects.

It reported a profit after tax of Rs809 crore in the three months ended December 2011 as compared to Rs591 crore in the year-ago period.

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