25 firm's keen to advise on Power sector reforms

Twenty-five national and international firms have evinced interest in offering consultancy services to Power Finance Corporation (PFC) for implementing the government's Rs.50,000 crore Power sector reform scheme. PFC has been designated as the nodal agency for implementing the Restructured Accelerated Power Development & Reforms Programme (RAPDRP) during the XIth Plan Period.

The programme designed to bring the aggregate technical and commercial losses to less than 15 per cent by the end of 11th Five-Year Plan, will be undertaken in two phases. Phase-I will involve establishing baseline data and application of information technology for energy accounting and auditing. IT consultants and IT implementing agencies will be recruited for the purpose. Strengthening of distribution projects will follow in Phase-II. The process consultant will assist PFC in the bidding process to appoint IT consultants and IT implementing agencies, as also in empanelling third party independent evaluation agencies to establish base line data system, verify AT&C loss figures, complete part-A projects and subsequent yearly AT&C loss figures, as directed by the Ministry.

The total fund flow of the RAPDRP scheme will be through PFC, which will also coordinate with all parties involved such as Power Ministry, CEA, NTPC, Power Grid Corporation and the state electricity utilities. According to the scheme, the entire loan extended by the government for Phase- I will be converted into grant after the required base-line data system is established. Up to 50 per cent loan for Phase-II projects to state utilities will be converted into grant in five equal tranches upon achieving 15 per cent AT&C losses for five years.

Indian government modifies ECB policy

The Indian Government has modified the external commercial borrowing policy (ECB) to boost overseas funding, by including Mining, Exploration and Refining sectors under the Infrastructure umbrella. The government raised the borrowing limit for infrastructure companies to $500 million during end-September 2008, as compared to $50 million-a-year limit for non-infrastructure companies, as of present. This allows the three sectors to raise borrowings up to $500 million a year for rupee expenditure, under the approval route. However, borrowings in excess of $100 million will carry a minimum average maturity of seven years. The three sectors are also likely get higher all-in-cost ceilings for ECBs, with minimum average maturity of seven years

SEZ developers, units, eligible for concessional financing

Like the Infrastructure sector, the SEZ developers and units will now be eligible for concessional financing. The Empowered Group of Ministers on 24 October 2008, decided that banks must treat all activities other than purchase of land, as infrastructure for financing purposes. The RBI had earlier advised commercial banks to treat SEZs as part of the Real Estate sector and not as Infrastructure for financing and risk weightage purposes.