PFC to seek $300 million abroad

State-run Power Finance Corporation plans to raise $300 million (Rs1,400 crore) through foreign currency borrowings in the next two-months, its chairman and managing director Satnam Singh told reporters in Mumbai on Wednesday.

The power sector lender is seeking to diversify its portfolio. The company is keeping tabs on the market and it feels this is an appropriate time for tapping the international market, Singh said. He added that the international market has undergone a change, and now rates are comparable to what is available in the Indian market.

The company has also decided to set up two 100 per cent subsidiaries - one for consortium lending and the other for funding renewable projects - effective from 1 April 2010. PFC will consider the possibility of taking a direct equity stake in the power projects, Singh said.

PFC has recently established a consortium lending group (CLG) with an aim to give a fillip to consortium lending operations, particularly through the power lenders' club (PLC), which has 21 members including LIC, HUDCO and 18 Indian banks.

The company will provide loans to power project promoters for their upcoming projects, based on the returns from their functional power plants. "Against the commissioned projects, we will securitize the returns and provide funds to the same extent," he said.

PFC has signed a memorandum with Gujarat Energy Development Agency for developing business in renewable energy generation projects in that state. It has sanctioned Rs600 crore and disbursed Rs60 crore for projects in the renewable energy sector. The company will also lend Rs550 crore to KSK Energy Ventures for a solar cell project after formally sanctioning the loan, he added.