Manali (Himachal Pradesh), May 30: Power Finance Corporation has said that it would persuade the states to form 'special purpose vehicles' for power generation under the companies act, in which it might take equity. Addressing a press conference after the 11th annual conference of PFC at Manali, PFC managing director A A Khan said today that the PFC would not advance loans to state governments but to specific projects with certain conditions.
He said that the PFC was trying to persuade and pressurise the governments to speed up power sector reform process and improve the functioning of state electricity boards.
"It is not possible to bring about reforms in a day but there was visible transformation in the functioning of government power agencies within past five years," he added.
Khan said that interest rate on loans for hydro-power projects was being reduced from 10.50 per cent to 10.25 per cent while the interest rate on loans for thermal power projects would be cut from 10.75 per cent to 10.50 per cent from June 1, 2003.
He said that repayment of loans had also been relaxed from 10 to 15 years and the interest rates had come down by 2.5 per cent during past three or four years.
He said that the PFC was financing all types of small and large projects and had financed Larji (126 mw), Uhal stage-111 (100 mw), Kshang (66 mw) and Nathpa-Jhakri (1500 mw) hydro-power projects in Himachal Pradesh to the tune of Rs 250 crore. The recovery rate of the loans was enarly 100 per cent and there was no repayment problems, he added.
The PFC was also financing the non-conventional energy projects and had sanctioned Rs 75 crore for six bio mass projects, he said.
Bureau Report