For the purpose SBI has put together a new product of converting the drawn term loan into a foreign currency (FCNRTL) term loan. The product envisages contracting a loan in dollars for a certain period and simultaneously purchasing dollars in the forward market for the same duration.

The difference between interest on the rupee term loan which is at 15.04 per cent and the interest payable on the FCNTRL and the forward premium works out to around 1.5 per cent which would save KPCL about Rs 2 crore per annum, a press communique from KPCL said.

During the entire period of loan there would be a saving of Rs 18 crore to KPCL. This is the first time that such a product has been conceived by SBI and is an innovative attempt to reduce the cost of funding projects.

StateBank of India had sanctioned an amount of Rs 160 crore for Raichur Thermal Power Station (RTPS) expansion project units 5 & 6 of KPCL. As on date an amount of Rs 129 crore has been availed by the company.