The Karnataka Government is mulling to disinvest 15 to 26 per cent equity in Karnataka Power Corporation (KPCL) to raise funds for new power projects with a total capacity of 8,200 MW.

KPCL has roped in SBI Capital Markets to study the issue and submit a report on the disinvestment proposal. While a final report is expected to be submitted within three months, the preliminary study had indicated that it is possible to raise Rs 4,000 crore to Rs 5,000 crore through disinvestment of 26 per cent equity.

The disinvestment, if cleared by the state government, may take place in several phases.

The new power projects taken up by the KPCL require an investment of Rs 40,000 crore. Of this, the equity of KPCL is 20 per cent amounting to Rs 8,000 crore while the remaining is to be raised through loans. This amount is likely to be raised by putting in the equity of Rs 2,500 crore from the state government and the profit of 1,500 crore to Rs 2,000 crore to be earned by KPCL over the next few years and a contribution of about Rs 1,500 crore from the equity partners for some projects.

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