Power Finance Corp to receive funding from IIFCL

Thu, May 15 10:42 AM

By Euan Rocha

NEW YORK (Reuters) - State-run lender, Power Finance Corp Ltd , will be given access to some funding from the India Infrastructure Finance Co Ltd (IIFCL), a top official said in an interview on Wednesday.

"The IIFCL have a $5 billion facility, and we talked to the finance minister as they have not been able to use it," said Power Finance Corp Chairman V.K. Garg told Reuters.

Power Finance Corp has requested $2 billion to $3 billion of this sum and expects a government order approving access to the funding to be issued shortly, said Garg, speaking on the sidelines of the India Infrastructure Investors Forum in New York.

Last week, after reports the company might receive access to the funds, shares of Power Finance Corp surged more than 10 percent. The company funds more than one-fifth of all power projects in India.

India has been facing power shortages in many areas and is attempting to rapidly expand generation capacity in a bid to meet the demands of its fast-growing economy.

Garg also confirmed the state-run lender is in talks with a few private equity firms and is looking at attracting additional investment from these sources.

"There are a lot of people talking about equity investments, but when it comes to the actual terms, then things become slightly difficult because of certain conditions being imposed by private equity funds," said Garg.

However, the company is confident it can iron out a deal with a private equity firm over the next two to three months, he said.

Last year, Reuters reported the company was considering a new equity fund and was courting investments from several overseas sources, including Blackstone Group LP and Goldman Sachs Group Inc.

Earlier Wednesday, Power Finance Corp said it has signed a loan agreement with Export-Import Bank of the United States for access to a $800 million facility to fund a project related imports from the United States in the next two years.

RECOMMEND THIS STORY