NEW DELHI, January 30: In a bid to part finance its Ninth and Tenth Plan projects, the National Thermal Power Corporation (NTPC) has asked for fresh loans from the World Bank along with restructuring of its earlier loans.Highly placed sources told The Financial Express that negotiations in this regard took place at a recent meeting of the NTPC's officials with World Bank executive director Surindra Singh.
NTPC, which is the Bank's largest beneficiary in the world by receiving over $4 billion of loans since 1975, has now asked the Bank to release a total of $1 billion to it by the end of this year.
Out of this, $200 million is the fresh amount and $800 million is part of the $1.2 billion `time slice loan' earlier agreed upon by the Bank, which was to be released to NTPC in two tranches of $400 million each spread over a period of time. Sources said the NTPC had asked the World Bank to restructure the release of this $800 million loan.
This issue of restructuring the loan along with its demandof a fresh loan was put forth in the meeting with the World Bank officials. Sources disclosed that NTPC had requested the Bank that instead of releasing $800 million in two tranches over a time gap, the Bank should give NTPC these two tranches together along with another $200 million, all in one go (ie a total of $1 billion).
On being contacted, NTPC chairman and managing director Rajendra Singh confirmed the move and said that before releasing these funds from its coffers, the World Bank officials would do an overall review of NTPC's operations starting March.
Following the review, if the Bank feels that NTPC is adhering to the guidelines and procedures laid down by it, funds to the tune of $1 billion will be released by the Bank. The World Bank officials will also review the resettlement and rehabilitation (R&R) programme of NTPC and see if it meets the World Bank's criteria or not. The funds are likely to flow by the end of this year.
NTPC officials said that soon after meeting the top brass of thecorporation, Surinder Singh had earlier scheduled a visit to the Singrauli site in the second week of January, which due to reasons unknown was cancelled.
The $1 billion-loan from the World Bank will be utilised to part finance the 2000 mw Talcher II project with an estimated cost of over Rs 7,000 crore. Singh said the Bank had already cleared the bidding documents for Talcher II.NTPC officials said the corporation had already utilised over $20 million out of the `time slice loan' of $400 million extended by the World Bank.
This $400 million, as per NTPC officials, will continue till the end of 1998 and the requirement of fresh loans comes only next year. Vindhyachal STPP Stage II, 1000 MW and environmental action plan for the ongoing project are being implemented under the World Bank loan for NTPC. The Bank, as per NTPC officials, has also agreed to fund the Kayamkulam combined cycle power projects under this loan.
Ties up syndicated loans of 18.34 billion yen
The National Thermal PowerCorporation (NTPC) has been able to finalise its much-touted syndicated loans amounting to 18.34 billion yen at 60 points above Libor from a consortium of leading international banks.
Highly placed banking sources said that a final agreement to this effect was signed between NTPC and the lead arranger for this loan, Sumitomo Bank, along with nine other international banks as co-arrangers, on January 14.
Sources said this exercise to raise 18.34 billion yen at 60 points above Libor, which was to retire NTPC's earlier yen debt, would result in huge savings to the tune of Rs 50 crore.
This is the third tranche of loan which the company has retired since last year, the earlier being 5 billion yen and 15 billion yen which were retired in February and September last year. The total savings from the pre-payments of the entire yen loans has been pegged at over Rs 130 crore, a huge saving to the state exchequer. The co arranger banks include big names like Bank Paribas, Development Bank of Singapore, DKBMerchant Bank, Fuji Bank, Sakura, DIK, Tokai and two others.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
