The Anil Ambani-led Reliance Power may tie-up the necessary funds for the 4,000-MW Sasan ultra mega power project in Madhya Pradesh this month, according to the Power Finance Corporation.
The PFC had sanctioned Rs1,770 crore for the project and the financial closure is likely by this month-end, its chairman and managing director Satnam Singh told reporters in Mumbai. The PFC is the only government-run lender for power projects, and is the nodal agency for the UMPPs.
Sasan will be the largest domestic coal-based power project in the country, supplying power to seven states across western and northern India. The project is estimated to cost about Rs20,000 crore, to be funded at a debt equity ratio of 75:25. The debt component would be raised by a consortium of banks led by State Bank of India.
Besides Sasan, Reliance Power has also bagged two other UMPPs - Krishnapatnam and Tilaiya - and the three projects together are being set up at an estimated cost of Rs 50,000- 60,000 crore.
The government is likely to announce three more UMPPs in Orissa, Tamil Nadu and Chattisgarh and request for qualification is expected to be floated over the next few months, according to Singh.
Asked whether the government would cap the number of UMPP projects for which a single company can bid, Singh said there would be no cap but added that it would call for increased performance guarantee in such cases.
Q4 profit up 32.2 per cent
Announcing PFC's financial results for the fourth quarter of 200-09, Singh said net profit increased by 32.2 per cent to Rs390.6 crore from Rs295.4 crore in the same period last year. The company's total income went up to Rs1,817 crore as against Rs1,365.2 crore year-on-year.
Singh said the Rs230 crore notional loss during the fiscal year was due to rupee depreciation. The company, he added, sanctioned Rs57,000 crore loans in during the year against a target of Rs 50,600 crore."FY09 loan assets grew 25 per cent," he said.
Singh said PFC's disbursements grew 30 per cent in 2008-09 against 15 per cent in fiscal 2008. Its loan assets grew 25 per cent and gross non-performing assets fell to 0.2 per cent from 0.3 per cent the previous year. Its net worth increased by 40 basis points to 14.82 per cent.
In fiscal 2009, PFC's disbursements were about Rs21,054 crore against a target of Rs19,300 crore. The cumulative sanctions and disbursements reached a figure of Rs233,978 crore and over Rs113,119 crore, respectively.
PFC's net profits rose 12.3 per cent to Rs1355 crore in 2008-09 from Rs1207 crore the previous year. Total income from operations rose to Rs6583 crore, an increase of about 31 per cent.
The company, he said, may borrow Rs 22,000-23,000 crore for FY10. Singh said the company would also offer Rs20,000 crore syndicated loan under consortium lending this fiscal. On the renewable front, PFC has signed a memorandum of understanding (MoU) with Ex-Im Bank of United States where exports to Indian projects will be supported with a proposed allocation of $800 million.
PFC has also incorporated a company, Power Equity Capital Advisors Pvt Ltd, to facilitate the flow of equity funds in various power projects. Singh said the company is keen on private sector financing this year.
The company is also the nodal agency for implementing the restructured accelerated power development and reforms programme (APDRP), under which it has already sanctioned Rs1950 crore and disbursed Rs325 crore last fiscal, he said.
Singh also said PFC is looking to expand its focus on funding of power equipment manufacturing capacities and coal mining activities from this fiscal. Last year, the company started financing projects in three new areas - coal mining, equipment manufacturing, and renewable power - and also began lending in consortium with other banks. However, its presence in these four segments is miniscule.
Singh said, "We are looking at entering power equipment and coal mine funding in a big way from the second quarter of this fiscal."