Rs 3000 cr sanctioned for NE power sector

Ajit Patowary

GUWAHATI, March 3 – The Government of India-run Power Finance Corporation (PFC) has sanctioned power projects worth Rs 3,000 crore for the NE region during the current financial year. Of the amount, Rs 611 crore has already been disbursed, said Rajeev Sharma, Director (Projects) of the Corporation while talking to this correspondent here today.

The NE region gets the highest priority in the scheme of things of the PFC, in line with the Government of India (GoI) policy. "Whenever we receive any proposal from the NE region, we attach the highest priority to it as per the GoI policy," he said.

Sharma, who was in the city in connection with the launch of the PFC's public issue for Long-term Infrastructure Bonds, said that the Corporation has funded the Namrup gas-based project, the 726.6 MW Paltana Gas-based Power Project in Tripura and the 600-MW Kameng Hydel Power Project of the NEEPCO.

The proposal for funding a Meghalaya power project in under process, he added.

He maintained that the performance of the power sector in Assam is improving after unbundling of the Assam State Electricity Board (ASEB). The PFC uses to assess the over all power scenario, the existing capacity and the inherent potential of the power sectors of the States during the technical appraisal it undertakes before funding any project.

But for undertaking such technical appraisals, the proposals for funding should be placed before the PFC by the State concerned, he said.

However, he maintained that the PFC is not doing anything for rural electrification. It is concentrating on urban electrification, as the nodal agency, under the RAPDRP programme of the Ministry of Power (MoP). The REC is the nodal agency in matters of rural electrification, he clarified.

Set up in July, 1986, the PFC is a leading financial institution of the country dedicated to the requirement of the power sector. It is under the administrative control of the MoP. It received the Non-Banking Finance Company--- Non-Deposit taking-Infrastructure Finance Company (NBFCND-IFC) status on July 28, 2010.

It has been registered as a non-banking financial company by the Reserve Bank of India (RBI) and the GoI conferred the status of a Nav Ratna PSU on it on June 22, 2007.

The bond: The infrastructure bond issued by the PFC with effect from February 24 last till March 22, 2011 and listed with the Bombay Stock Exchange, has a face value of Rs 5,000 each. The CRISIL and ICRA have rated it as AAA and LAAA respectively. The ICICI Securities Ltd and the SBI Capital Markets Ltd are the lead managers to the issue.

Under this bond issuance, an investor can avail a deduction up to Rs 20,000 in the taxable income for the current financial year. This deduction is over and above the Rs 1 lakh deduction that can be availed under section 80C of the Income Tax Act.

The company is offering the bonds which shall have a fixed rate of interest up to 8.5 per cent and shall be payable on annual or cumulative basis. The bonds offered will be in maturities of 10 years and 15 years with a buyback option after five years and seven years respectively, said Parminder Chopra, PFC Additional General Manager (Finance) while speaking at a press conference held on the occasion here today.