Power Finance Corp, the nodal agency for awarding ultra-mega power projects, is considering divesting its 8% stake in the PTC India Ltd as part of a move to generate capital for funding the power sector in the 11th Five-Year Plan (2007-11).
The power ministry has estimated a total funding requirement of $250 billion (Rs 10,29,000 crore) during the 11th Plan period, of which $38 billion (Rs 1,54,408 crore) is expected to come from the PFC.
PFC officials told FE that besides tying up with various banks across the globe for funds, PFC at other options. PFC may appoint a consultant to find out whether it would be gainful for it to sell its 8% stake in PTC India when PTC makes a public issue later this year.
If the consultant says yes, PFC may approach other promoters of PTC to offload its stake. PFC would also be required to evaluate other possible options for divesting its stake, officials said.
According to the officials, earlier this month, PFC had lobbied the government to relax norms for external commercial borrowings by banks and non-banking finance companies and allow raising of more than $500 million through the automatic route.
PFC argued that easing ECB norms would have replaced costly multilateral debt with cheaper funds, reducing the interest burden of ultra-mega power projects and help earning more on capital.
But the finance ministry tightened the ECB norms to prevent further rupee appreciation.