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Home News Power Sector News SBI to finance for Ultra mega Power projects

SBI to finance for Ultra mega Power projects

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SBIThe country’s largest commercial bank, State Bank of India (SBI), is working on a special package for the fund-starved power sector “We have a very attractive portfolio of power projects that has received SBI funding. Contrary to market perception, our experience of lending to power sector has been very good and we would like to increase exposure in power as and when good projects come to us,” deputy managing director of SBI Hemant Contractor told ET on the sidelines of CII conference on power sector.

He said the bank was willing to offer loans for 10-15 years to ultra mega power projects (UMPPs) because these capital intensive projects are long gestation projects. SBI has already provided loans to Mundra and Sasan UMPPs. Commercial banks in the country, including SBI, currently offer project loans of between seven to nine years. The state-run Power Finance Corporation (PFC) is also currently offering loans of up to 12 years.

SBI’s exposure to the infrastructure stands at over Rs 30,000 crore, with power sector getting nearly half of it. “This is merely 5-6% of our total advances and there is scope for further expanding this exposure,” Mr Contractor said.

Earlier, addressing the conference, NTPC chairman and managing director RS Sharma said the PSU power company would scale up its import of coal to 12.5 mt during 2009-10 to meet the requirement of its existing and upcoming power projects.

“We would import 12.5 mt coal in the next financial year (out of the total requirement of 150 mt). We will add 3,000 MW power capacity during the same period,” Mr Sharma said. For the current fiscal, NTPC has imported nearly 5 mt coal out of the targeted 8.2 mt, the total requirement being 125 mt. The company is expected to import from Indonesia and Australia.

NTPC will commission two units of its Dadri thermal power station in Uttar Pradesh, one unit each in Sipat (Chhattisgarh), Korba (Chhattisgarh) and Aravalli (Jhajjar, Haryana). The additional capacity generation (3,000 mw) will take place at two units of the Dadri thermal power station, and one unit each of the Sipat, Korba and Aravalli power plants, Mr Sharma said. Meanwhile, the government has increased the coal import target of power utilities by 40% to 35 mt in 2009-10 to ensure the units do not reel under a dry fuel shortage.

“We have set a coal import target of 35 mt for power utilities in 2009-10 against the earlier planned 25 mt,” power secretary VS Sampath said at the CII event. The ministry had earlier set the coal import target at 25 mt for power utilities, which was last month revised to 28.7 mt in view of the additional power generation capacities lined up by companies.

Source - Economic Times

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