The agreement was signed here on Friday between NTPC director (finance) CP Jain and SBI chief general manager S Gururajan in the presence of NTPC chairman and managing director Rajendra Singh and SBI chairman GG Vaidya.The loan will be drawn by NTPC in three years including the current fiscal. It will be repaid in ten years with a moratorium period of three years.The interest will be charged on the basis of `State Bank Medium Term Lending Rate' at the rate of 12 per cent per annum on a floating basis.

"It will protect the interests of both SBI and NTPC," Singh told reporters after signing of the agreement.

SBI chairman GG Vaidya said that the bank has a total exposure of Rs 6,920 crore in the power sector for the fund-based investment while the non-fund based exposure is another Rs 7,000 crore.

He added that in the current year, the bank would finance power projects to the extent of Rs 2,000 crore.

Singh said that besides Rs 750 crore, NTPC is negotiating a loan of another Rs 550 crore from the SBI associate banks.

He said NTPC would need an investment of Rs 50,000 crore for becoming a 30,000 MW generating company by 2007 and 40,000 MW by 2012. "We are very well poised to meet all the targets," said Singh. He added that NTPC has assured the government that the company is capable of raising its investment funds on its own balance sheet through the domestic or foreign markets.

NTPC has also signed an agreement with the Housing Development Finance Corporation (HDFC) for a term loan of Rs 100 crore. Singh said that with mega investment plans, the banks and term loan institutions are queuing up before NTPC for deploying their funds due to excessive liquidity in the marketplace.

Out of its 30,000 MW plan, as much as 9500 MW is already under construction and bidding. The NTPC CMD said that agreement with SBI was a good reflection that there was no dearth of money for the good projects.