Power Finance Corporation (PFC) is planning to tap the overseas market to raise a whopping $1 billion in the current fiscal. The borrowing programme is aimed at meeting the funding requirements of the power sector, which requires an estimated Rs 8,50,000 crore during the 11th Plan to add 68,869 mw of fresh capacity.
The company also plans to raise Rs 9,000 crore of debt by floating power bonds in the domestic market to get wider retail participation. A portion of it would also be raised through FCCBs.
PFC is a nodal funding agency in the power sector that provides debt and quasi equity to projects. The company was listed in February after an IPO through which it raised about Rs 1,000 crore.
For its overseas borrowings, the company has secured RBI’s approval to raise $500 million through external commercial borrowings (ECBs). The official said after this fundraising exercise, the company would seek the apex bank’s approval for raising $500 million more in the overseas markets through a diversified portfolio of instruments such as floating power bonds, looking at the ADR/GDR route or lines of credit with international financial institutions such as ADB.
“The company’s first tranche of borrowings this year is already in an advanced stage. PFC would launch a roadshow next week in the US to raise $300 million through private placement. It would also seek approval to raise resources through Euro bonds. Another $200 million is proposed to be raised through syndicated loans. The entire borrowings programme would be launched in two months,” the official said.
Funds worth Rs 12,500 crore are expected to be raised by PFC in the domestic market this fiscal. Apart from bonds, it would raise medium-term loans worth Rs 3,500 crore from institutions.
Read more in The Economic Times article.
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