NTPC retires 8.7172 bn yen loan

NTPC, which is the sixth largest power utility in the world, would save about Rs six crore on account of differential in the interest between IBJ and the fresh loan.

While the Corporation was paying interest at the rate of 2.7 per cent to IBJ and the new loan would carry the tag of 1.4 per cent over London Inter Bank Offer Rate (LIBOR), which will be payable every six months, officials said.

Sources said that SBI, Tokyo had organised the fresh loan and the bank also arranged for necessary interest rate swap. The profit-making Corporation has constantly been cutting down on its borrowings which have come down to Rs 9,642 crore in 1999 from Rs 10,574 crore in 1995 which helped it improve the profitability to 40.5 per cent from 39.2 per cent.

SBI Tokyo arranged the syndicated credit for NTPC without any security but the loan agreement put some conditions on future borrowing of the corporation. As per the conditions, NTPC would need prior clearance from the lenders for any rupee borrowing from domestic market, foreign currency borrowing from multilateral funding agencies and any short-term borrowing for up to twelve months.

The loan management by the corporation, which generates 24 per cent of the country’s electricity, has reduced its debt-equity ratio from 0.74 in 1995 to 0.48 in 1999.

With its massive expansion plans needing an investment of Rs 1,24,881 crore till the Eleventh Five Year Plan, the Corporation would borrow over Rs 80,000 crore in the next twelve years including overseas borrowings in excess of Rs 55,000 crore, sources said.

As per the NTPC’s corporate plan, the Central Power Utility would increase its capacity by a staggering 150 per cent to about 45,000 mw from less than 18,000 mw now.