MUMBAI: Power Finance Corporation (PFC) is launching a mega equity fund to finance the upcoming power projects in the country. The decision stems from the increasing appetite for equity funding for power projects in India.
“We are currently in talks with private equity players and foreign investors for participating in the fund. Its size is yet to be finalised,” said PFC chairman & managing director VK Garg. However, sources told ET that the fund is likely to have a corpus of Rs 2,500 crore initially.
It plans to pick up equity stakes in power companies as and when they launch their IPOs. PFC is unlikely to invest in the fund, but will attract other investors and act as an investment advisor to the fund. For adding 78,000 MW under the 11th Plan, the power sector requires over Rs 10 lakh crore. “But only Rs 6-6.5 lakh crore is available now.
The sector needs another Rs 4 lakh crore to complete the projects,” said PFC projects director Shyam Wadhera.
The state-run power financier is planning to raise Rs 10,000 crore to Rs 12,000 crore from the domestic market in the second half of the current fiscal.
“The company has already raised Rs 7,600 crore in the first six months and disbursed Rs 6,556 crore. In the last fiscal, we had raised Rs 12,600 crore and disbursed Rs 14,000 crore,” said PFC finance director Satnam Singh.
The decision to raise money from the domestic market comes in the wake of regulatory hurdles delaying its earlier plan to raise about $1 billion from the overseas market, said Mr Garg.
The company expects to revise interest rates for further loans worth Rs 3,500 crore in the second half of FY08, said Mr Singh.
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