Sluggish credit offtake hits PFC

NEW DELHI, SEPT 22: Power Finance Corporation PFC today said that there was a sluggish offtake of credit in the country, evident from a...

NEW DELHI, SEPT 22: Power Finance Corporation PFC today said that there was a sluggish offtake of credit in the country, evident from a dip in PFC8217;s disbursals of Rs 800 crore in first-half of 1999-2000 compared with Rs 1,000 crore during the previous year. PFC has sanctioned loans to about 16 private power projects out of which disbursals have started to only three projects.

Owing to the slowdown in credit offtake, PFC was not able to avail fully the credit facility of about Rs 500 crore extended by banks. PFC, as per the memorandum of understanding MoU with the Government, has targeted a disbursal of Rs 2,250 crore while the internal target of the company is pegged at Rs 3,000 crore. Going by the performance during the first six months, the target may prove ambitious.

Chairman and managing director of PFC Uddesh Kohli said that PFC was in informal talks with banks to lead consortium financing for the public and private sector power projects.

Announcing the financial results for 1998-99 after theannual general meeting of the company, Kohli said that net profits had increased marginally to Rs 541 crore from Rs 528 crore in the previous fiscal, though income had increased by 24 per cent to Rs 1,407 crore.

Kohli admitted that PFC might have to review its Rs 5,000 crore power funding target by 2001-02 in view of the slowdown, but this could be done only after the mid-term appraisal of the Ninth Plan performance for power sector by the Planning Commission.

The corporation has sanctioned loans worth Rs 3,339 crore as on March 31 this year, while its disbursements during the the same period was Rs 2,467 crore, Kohli said.

Asked about the reasons for PFC8217;s disbursals being slow compared to the rate of sanctions, Kohli said disbursals by PFC to utilities had been slow due to the delay in progress of clearances to private power projects and in getting state Government guarantees.

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On the resource mobilisation front, the corporation has raised Rs 151 crore through tax-free bonds, Rs 212 crore throughtaxable bonds apart from getting a loan of Rs 100 crore from the State Bank of India at a coupon rate of 12.75 per cent during 1998-99, Kohli said.

The corporation had also successfully mobilised 100 million over Rs 400 crore through floating rate notes FRN issue, he said adding the company had also mopped up 15 million long term rupee-dollar swap with SBI which will bear exchange and interest rate risks.

PFC has also slashed down the lending rates by one per cent for all projects covered under the 10 23G, Income tax benefits for private power projects.

The corporation has also sanctioned and disbursed Rs 180 crore towards working capital requirements of various state electricity boards SEBs, Kohli said adding the company was laying a special focus on North eastern region by sanctioning Rs 106 crore to three projects each in Assam, Mizoram and Nagaland.