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Tuesday, 3 May 2011

DVC to raise INR 7100 crore to fund expansion

Damodar Valley Corporation plans to raise INR 7100 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 INR 8200 crore this fiscal to add 2200 MW of generation capacity. Of the INR 7100 crore, INR 3500 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.

A senior DVC official said that "The bond will have tenure of 15 years and we hope to receive sanctions for the sum from institutions in the next 3 weeks to4 weeks’."

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.

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.

(Sourced from The Economic Times)

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