"We got the sanction from IDBI earlier this month and there is no commitment charge," BHEL chairman and managing director KG Ramachandran said adding that he would soon take the proposal to the board.

This is the third major institution backing BHEL after ICICI and IFCI recently committing Rs 500 crore and Rs 200 crore respectively, thereby taking the aggregate credit facility from the development financial institutions to a hefty Rs 1,700 crore.

The navratna corporation, with a net worth of Rs 3,000 crore, would use the newly acquired financial strength for backing its bids for various power projects to retain its leadership position, Ramachandran said adding that its current market share in the power industry was in excess of 80 per cent.

Ramachandranclarified that IDBI's facility would be used to provide buyer's credit where bhel would successfully bid for supply of power plant packages or equipment, which, in other words, meant no liability on BHEL.

Ramachandran said, "Once the project is bagged by BHEL, the credit facility by the development financial institution would be given to the project promoters for which they would have to negotiate the terms."

The process of offering financial package to secure bids in the increasingly competitive power sector in India by BHEL assumes significance in the backdrop of the criticism by the disinvestment commission which recommended last month the privatisation of the corporation.

In its twelfth report, the commission said "though BHEL is competitive, with the international majors in terms of cost, delivery and equipment in the domestic market, the company's inability to match financial packages provided by the multinationals has been one of its major weaknesses."

Ramachandran said that the corporationhad enough financial strength in terms of both internal accruals and high borrowing capacity and was capable of competing with the best in the world.

Besides these financial institutions, State Bank of India and Power Finance Corporation and some German lending institutions were in touch with BHEL offering various credit options--mostly project-specific, he added.

Coupled with very low debt-equity ratio, high net worth and increasing surpluses year after year, the new credit facilities would give the corporation necessary strength for offering financial packages, Ramachandran asserted.