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Home News Power Sector News DVC to raise Rs 7,100 crore to fund expansion

DVC to raise Rs 7,100 crore to fund expansion

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GenerationDamodar Valley Corporation (DVC) plans to raise Rs 7,100 crore in the current fiscal through a mix of bonds and bank loans to fund its expansion plans. The state-owned power producer has planned a capital expenditure of Rs 8,200 crore this fiscal to add 2,200 MW of generation capacity. Of the Rs 7,100 crore, Rs 3,500 crore will be raised through bonds, for which DVC has called for expression of interest from financial institutions. The remaining will be borrowed from lending institutions.

"The bond will have a tenure of 15 years and we hope to receive sanctions for the sum from institutions in the next 3-4 weeks," a senior DVC official told ET. The fund will be drawn in a staggered manner over the year. The bond interest rates will be linked to yield on government securities with a certain spread, the official said.

"This sum is being raised to finance a portion of DVC's ongoing thermal projects that are slated to commission in the 12th Five-Year Plan period," he said.

DVC's plans include addition of 1,200 MW capacity at its Raghunathpur Thermal Power Station, and a 500 MW plant at Maithon Raight Bank in Jharkhand in a joint venture with Tata Power Company .

The company will borrow Rs 2,800 crore from lenders for its 500 MW Bokaro project, a thermal power project in Jharkhand and to build road links and switch yards.

The Bokaro project, for which work has started, is to be commissioned in the early part of the 12th Plan period. It is being financed on a 70:30 debt-equity ratio.

"We have already spent our equity portion on the project from internal resources and will raise the debt portion of Rs 2,800 crore now," the DVC official said.

The company will also raise Rs 800 crore from financial institutions for transmission and distribution projects. Total investment on the project is estimated at Rs 1,182 crore, including 225 km of 400 kv transmission lines, 438 km of 220 kv lines, and 66 km of 130 kv lines.


Source - Economic Times

 

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