The Power Finance Corp (PFC), a government of India enterprise, has approved a financial aid of ₹13.5 billion (~$212 million) to Bihar for a transmission line project.
The aid has been provided to the Bihar Grid Company Ltd (BGCL), which is a joint venture of the Power Grid Corporation of India and the Bihar State Power (Holding) Company Ltd. The funding for the project will be provided in debt-equity ratio of 80:20, according to a Press Trust of India (PTI) report.
The total cost of the project is estimated to be ₹1.69 billion (~$265 million) and it is expected to be commissioned by July 2021.
“The amount has been sanctioned for the construction of 16 400 kV, 220 kV and 132 kV transmission lines, 4 associated substations and 7 line bay extension works in Bihar,” the PFC said in a statement.
“The PFC has a long-standing relationship with Bihar state utilities and Power Grid and this upcoming transmission project is further expected to strengthen the bond as the entire debt component has been sanctioned by PFC as a sole lender,” it added.
In November 2017, the PFC made its first international bond issuance in more than two decades when it issued $400 million (~₹25.72 billion) of green bonds on the London Stock Exchange (LSE)’s new International Securities Market (ISM), as reported previously by Mercom.
Of late, the PFC has been trying to shift its investments away from conventional energy in order to focus more on the country’s renewable energy projects, last-mile transmission and distribution projects in addition to making existing thermal units more energy efficient and refinancing of old projects.
In 2017, Mercom had reported that the PFC is planning to finance power transmission projects awarded to private transmission project developers, through tariff based competitive bidding. Lagging power demand and rising Non-Performing Assets (NPAs) in the thermal power sector has pushed it to revamp its lending portfolio.
Ankita is an editor at MercomIndia.com where she writes and edits clean energy news stories and features. With years of experience in the news business, Ankita has a nose for news and an eye for detail. Prior to Mercom, Ankita was associated with The Times of India as a copy editor for the organization’s digital news desk. She holds a Bachelor’s degree in Psychology from Delhi University and a Postgraduate Diploma in journalism. More articles from Ankita Rajeshwari.