IFC to lend $100m to MahaTransco

Written by Sanjay Jog | Mumbai | Updated: Jan 1 2009, 06:05am hrs
The World Bank arm, International Finance Corporation (IFC) has proposed to provide long term loan of $100 million to the Maharashtra State Electricity Transmission Companys (MahaTransco) $4 billion capex already launched for next five years. MahaTranscos proposal, which was submitted on December 29, will be taken up for the approval at the IFCs board meeting slated for March 5 next year. MahaTransco will mobilise the balance fund from Power Finance Corporation, Rural Electrification Corporation and by way of internal accruals. IFCs investment would be utilized in incurring capital expenditure towards transmission lines in Maharashtra.

Maharashtras $4 billion investment is part of the states over Rs 60,000 crore investment planned for the entire power sector. The state run generation company, MahaGenco has proposed an investment of Rs 30,000 crore while Rs over 5,000 crore by the distribution company, MahaVitaran.

MahaTranscos investment aims to augment existing deliverable capacity and reduce transmission losses. IFCs financing will signal to the market that well-run energy sector companies can attract commercial financing for long tenors and thereby make the companies more attractive for local funding.