PFC subsidiary to offer loan syndication for IPPs

State run Power Finance Corporation (PFC) today said that its subsidiary, PFC Capital Advisory Services (CAS) which would focus on loan syndication for the private sector power projects would become operational this fiscal.
   
"The company has been set up and registered. We have also applied for the commencement of business to the Registrar of Companies (ROC), and within this financial year it will start functioning," PFC Director-Commercial M K Goel told PTI.
     
A tentative capacity addition of around 100,000 MW has been envisaged for the 12th Plan, of which 60%is expected to go to IPP's (Independent Power Producers), a PFC official said.
     
In the 11th Five Year Plan, the share of IPPs in power capacity addition was close to 28%. "In the case of IPP's, developers and promoters usually put funds in the ratio of 30:70, in which the equity component is 30%, and remaining 70% is raised through debt," Goel said.
     
"Presently, PFC can only finance upto 25% of the project cost. To meet the balance funding requirement of 45%, an IPP has to syndicate with a number of other institutions, taking long for fund tie-ups," he said.
     
"PFC-CAS will be a one point stop for the IPPs as it will syndicate with other lenders and institutions for the balance fund requirements also, besides the financing from PFC upto the permissible extent," Goel said.
      
"The move will shorten time frame of fund tie-ups for the future power projects in the country," he said.