Financial Briefs: India and overseas

India and overseas

PFC sanctions Rs 91.28 billion loan to Tamil Nadu utilities

The Power Finance Corporation (PFC) has sanctioned a loan of Rs 91.28 billion to provide financial assistance to power utilities in Tamil Nadu. The company has approved a term loan of Rs 54.74 billion for Tamil Nadu Generation and Distribution Corporation Limited and Rs 36.54 billion for Tamil Nadu Transmission Corporation Limited. PFC has also given in-principle approval, to the two utilities, of Rs 31.25 billion for the conversion of existing overhead cables to underground cables in the state.

Central government sells equity shares in NHPC

The central government has sold equity shares worth Rs 19.5 billion in NHPC Limited under the company’s recent buyback offer. NHPC had offered a price of Rs 32.25 per equity share under the buyback scheme to its shareholders. Following this, the total shareholding of the government has reduced from 8.25 billion shares to 7.64 billion shares. Meanwhile, the government‘s equity stake reduced marginally to 74.5 per cent from 74.51 per cent after the share sale.

ADB sanctions $175 million loan to Powergrid

The Asian Development Bank (ADB) has sanctioned a $175 million loan to Powergrid for expanding the transmission network of solar energy in the country. The funding will help improve the capacity and efficiency of interstate transmission networks for disseminating electricity generated from new solar parks. The new transmission lines will help evacuate 2,500 MW of power from solar parks in Bhadla in Rajasthan and 700 MW from Banaskantha in Gujarat. The proposed transmission facility will also aid in increasing solar power generation by 4.2 GW and cut carbon emissions by over 7 million tonnes annually.

REC extends financial assistance to DVC

The Rural Electrification Corporation (REC) has signed an MoU with Damodar Valley Corporation (DVC) for the financial assistance of Rs 46.5 billion. The MoU will ensure financing for ongoing and upcoming projects of DVC on competitive terms and for extending other value added services over the next five years.

European Investment Bank approves Euro 200 million loan to SBI

The European Investment Bank has approved a Euro 200 million (Rs 14 billion) long-term loan for the State Bank of India (SBI) to finance solar projects across the country. The interest on the loan will be at a concessional rate (three- month LIBOR plus 0.99 percentage point). The loan will support a total investment of Euro 650 million in five large-scale solar photo voltiac power projects under the Jawaharlal Nehru National Solar Mission. Four solar power projects at a generation capacity of 530 MW have already been identified for this purpose.

Macquarie to buy Hindustan Power Projects‘ solar assets

Australia-based Macquarie Group has agreed to buy 330 MW operational solar assets from Hindustan Power Projects Private Limited. The deal is envisaged at a total value of $660 million. The proposed deal will facilitate the Macquarie Group’s entry into India’s renewable energy sector. The Macquarie Asia Infrastructure Fund will hold 100 per cent stake in these assets.

OPGC raises equity for investment expansion

The Odisha Power Generation Corporation (OPGC), a joint venture between the Odisha government and the US-based AES Corporation, has raised an equity of Rs 4.85 billion from its stakeholders. While the Odisha government has invested Rs 2.47 billion corresponding to its stake of 51 per cent, AES has invested Rs 2.38 billion for its 49 per cent stake. The equity infusion is done to expand OPGC’s 420 MW coal-based plant in the IB Valley, Odisha.

World Bank lends $102 million to Vietnam for energy efficiency projects

The World Bank has approved a loan of $102 million to the Government of Vietnam to adopt energy efficiency technologies and practices across industrial enterprises. Under this project, industrial enterprises can access a new line of credit to fund their purchases of energy efficiency and production optimisation technologies. Funding under this project will be provided to participating financial institutions, which will then lend to industrial enterprises to be invested in energy-efficiency subprojects.

NLC India to acquire 3,000 MW of stressed capacity

NLC India is planning to acquire about 3,000 MW of stressed power generation capacity. The move is in line with the company’s strategy to utilise the revenue generated from operating such projects to finance its capex. NLC has, reportedly, shortlisted GMR Group’s 1,370 MW coal-based power project in Chhattisgarh and Ind-Barath Power Infra Limited’s 700 MW thermal power project (TPP) in Odisha for acquisition. The potential value of the proposed deals is estimated at Rs 120 billion. NLC has already signed an agreement to acquire Damodar Valley Corporation’s (DVC) 1,200 MW Raghunathpur TPP in West Bengal through a joint venture company proposed to be formed with DVC, with an equity shareholding of 74:26. However, the proposed deal is stuck due to delay in approval by the West Bengal government.