PFC to set up JV with Tata Capital for $1 billion PE fund
12 Dec 2012
State-run Power Finance Corporation (PFC) along with Tata Capital will set up a $1 billion private equity (PE) fund that will invest in the equity of private power projects.
Tata Capital will hold a majority 51 per cent equity in the joint venture with PFC holding the remaining 49 per cent stake. The fund will have an initial corpus of $1 billion.
"We have selected Tata Capital as our joint venture partner for setting up a PE fund...in which they would be having 51 per cent stake and PFC 49 per cent," PFC finance director R Nagarajan said.
"PFC is in the process of finalising the JV terms. The fund is expected to become operational over the next six-nine months period," he said.
"To begin with we target a corpus of $250-300 million," Nagarajan said.
The power sector lender has already started funding of fuel sources like coal mine, coal transportation facility, and laying of gas pipelines, so as to bridge the widening gap in availability of fuel sources. PFC's target for sanctions this fiscal (2012-13) stood at Rs45,140 crore, of which it has sanctioned Rs41,732 crore.