EDC extends $75-m line of credit to Power Finance Corporation

New Delhi, June 6 : EXPORT Development Corporation (EDC) of Canada will extend a 75 million dollar line of credit to Power Finance Corporation (PFC) for financing power projects requiring Canadian goods and services.

PFC chairman and managing director AA Khan and EDC vice-president June Domokos will sign the agreement for the line of credit in the presence of power minister Suresh Prabhu, now in Canada, and Canadian international trade Minister Pierre Pettigrew.

“The loan does not carry any immediate commitment charges as in the case of other term loans. It will be available once the projects are identified,” R Krishnamoorthy, director (finance) of PFC, told PTI.

The 12-year tenure line of credit would carry an interest rate of libour plus 85 basis points, he said adding the credit line would be utilised for financing tied-up projects.

Besides the surcharge, PFC would pay 0.25 per cent of the drawal amount if PFC is not able to utilise the sanctioned amount, Mr Krisnamoorthy said, adding that EDC can finance up to 85 per cent of the import content from Canada.

The line of credit would be available from 24 months of signing of the agreement.

PFC would use the credit line to finance generation and transmission power projects particularly in the private sector. The corporation has till now sanctioned total term loan of Rs. 4837.36 crore to 26 private sector projects.

The EDC line of credit would be utilised for financing established projects with the thrust on renovation and modernisation of machinery and equipment, Mr Krishnamoorthy said, adding that the Corporation was, however, open to consider other projects also.

PFC has already received request from Vande power project from West Bengal for financing up to $ 35 million for renovation and modernisation from the Canadian line of credit. The Corporation has also received a few more requests, which are being reviewed on a case to case basis, he added.

PFC would also pay one-time administration fee of 2.5 per cent on each allocation.

-- PTI