By Sachin Murdeshwar
Mumbai ：
Power Finance Corporation : Significant highlights and achievements in FY 2017-18
- Diversification in Business
- Recorded robust loan asset growth of 14% this year
o Due to PFC’s highest ever disbursements of Rs. 64,400 crores in FY 2017-18 and
Highest ever sanctions of Rs. 1,16,000 crores
- Disbursements saw significant jump in area of Renewables & Refinancing
o Renewable business saw 260% growth (from Rs 2,500 crores to 9,000 crores)
Some of the significant Renewable deals:
- 5 wind projects of IL&FS – Rs 2,500 crores
- ACME 3 Solar projects – Rs 950 crores
- Mytra Wind – Rs 750 crores
o Refinancing business saw 100% growth (from Rs 6,900 crores to Rs 13,750 crores)
Some of the significant refinancing deals were
- NTPC Meja – Rs 3,700 crores (Replaced 16 Banks)
- Raichur Yermarus TPS – Rs 1,700 crores (Replaced 7 Banks)
- New areas of Funding
o First time ventured into Irrigation Schemes: Funded Electro & Hydro mechanical components of irrigation schemes of Telangana – Sanctioned Rs.12,000 crores and Disbursed Rs.2,000 crores (backed by State Government Guarantee)
o First waste to energy Project by PFC – Sanctioned & Disbursed Rs.290 crores to Ramky Group
- Also sanctioned 15 MW WTE project in Ahmedabad (Good Watts Energy)
Other areas that we are exploring to diversify loan portfolio includes funding
- Electro & Hydro mechanical components related to Lift irrigation / Sewage treatment plants / Smart Cities
- Gas / LNG / coal mining
- Railway electrification
- Funding Smart Cities Infrastructure
- E-Vehicle Manufacturing Units (including Charging Stations)
- Electric charging infrastructure for promoting e-vehicles
- Battery manufacturing units for solar projects
- Mini / Micro grids for distributed generation
- Energy Efficiency Systems like Cogeneration / Tri-generation / combined heat & power
- Waste heat recovery systems
- Diversification in Borrowings & Efforts undertaken for reduction in cost of funds
Funds Mobilized during FY 2017-18 – Approx. Rs. 78,000 crores
- Raised highest ever foreign currency loans of ~ US$1.7billion in a year
o First time tapped Green Bonds of US$ 400 Million – Achieved tightest pricing
o Raised US$ 800 million syndicated loans in a year
o Raised FCNR B loans of US$ 460 million
- Highest ever refinancing of existing ECBs of US$1.1billion to reduce cost
o US$ 450 million already done – Savings Rs 60 – 70 crores
o US$ 250 million already done (effective from June, 2018) – Savings Rs.17 crores
o US$ 400 million is underway for refinancing
- Structured deal for 10 year paper with LIC for Rs. 5,000 crores – Raised at a very competitive rate
As result, Average cost of funds reduced by 23 bps (i.e. from 8.41% to 8.18%)
- Asset quality
Total Loan Assets: Rs. 2.79 Lakh crores
Therefore 89% of our total asset book is not having any kind of stress
Out of the Stressed Projects
- 55% are commissioned(i.e. 10 GW out of stressed capacity of 18.4 GW)
- ~ 50% has coal linkage / FSA
Resolution process
- Four projects are in advanced stage of resolution amounting to Rs. 4,300 crores, where we don’t expect major haircut
o DANs & Shiga projects in Sikkim signed PPAs & should be out of stress
o GVK Ratle – Borrower agreed for One Time Settlement
o South East – talks are in advanced stage with UP for takeover
- 4 projects are under bidding for change of management (i.e Rs. 6,300 crores)
Market response is good as the players participating are reputed
o GMR Chhattisgarh – 5 Bidders submitted Non-Binding offers (NLC, Adani, Vedanta, Torrent, JSW) – Last date of submission of final bids 11 June, 2018
o KSK Mahanadi – 15 EoIs received, 13 qualified & RFP to be issued shortly
(Qualified Bidders: Adani, Hinduja, JSW, Resurgent, Torrent, Edelweiss, India Resurgence, L&T, SSG Capital (Singapore), Vedanta, Lone Star Fund, Merrill Lynch, NIIF)
o Jhabua Power – 18 EoIs received, finalizing evaluation criteria to float RFP
(Adani, Bank of America Merrill Lynch, Bhilwara Energy, Edelweiss, Hindustan Thermal Power, JM Financial, Ind RF, JSW, KKR (Fund), Lonestar-IL&FS, Resurgent Power, SC Lowy, Torrent, Vedanta, Varde Partners, SSG Asia, World Window EXIM, NIIF)
o Essar Mahan – EoIs to be floated shortly
- 9 Projects are being resolved through NCLT route (i.e Rs. 8,100 crores)
- Rattan India Nasik (i.e Rs 3,000 crores) – talks are on with Government of Maharashtra
- Resolution plan under finalization for 6 projects (i.e. Rs. 8,700 crores)
o RKM Powergen – Under restructuring, terms to be finalized in Jun, 2018
o Rattan Amarvati – Under restructuring
o Resolution Plan underway : Essar Transmission, India Power Haldia, RS India and Astonfield
Reversals likely in FY 2018-19
Government Sector
- Rs. 4,600 crores Government NPAs will get an upgrade – Reversal is Rs. 230 crores
- Rs.12,000 crores Government Restructured Assets to upgrade – Reversal is Rs.600 crores
- Sectoral developments
Govt. of India has launched various initiatives for resolving power sector issues
Improvement in operational and financial performance is visible
UDAY
Target by March, 2019 Current Status
AT&C Losses 15% 19.87%
ACS-ARR GAP 0.23 Zero
Power Supply 19.9 Hours 24×7 Power for All
IPDS / R-APDRP
- 1,396 towns are IT enabled now – to improve billing / collection efficiency
o 33% revenue collection is digital now (April, 2018)
- 34,000 urban feeders connected to National Power Portal – Online data available for 31,667 urban feeders to monitor AT&C losses online
- Common Compliant (including Theft Reporting) No ‘1912’ operational in all utilities
DDUGJY
- Led to 100% village electrification – to result in higher demand for power
Saubhagya
- Expected to increase power demand by ~28,000 MW
SHAKTI (Scheme to Harness & Allocate Koyla Transparently in India)
- Scheme introduced to alleviate stress in generating utilities
- 10 bidders with capacity of 9,000 MW participated in auction
o KSK Mahanadi project of PFC got benefitted from this
o Other bidders also started getting coal
Mid Term PPA Scheme
- To purchase 2,500 MW for 3 yrs from commissioned projects with no PPA
- Bidding likely to conclude by mid-July, 2018
- Will help projects sell power on a consistent basis
Features
- Procurement will be done through DEEP E-Bidding Portal.
- Two part tariff, where
- Fixed Charge fixed at Rs.0.01/kWh & specified in the Bidding Document &
- Variable Charge shall be quoted by the Bidders
iii. Single entity can be allotted maximum capacity of 600 MW (min lots of 100MW)
- Assures a minimum off-take of 55 per cent of contracted capacity
- The Tariff will be fixed for three years without any escalation
Status
- Pre-bid meeting was held in second week of May 2018
- RFQ is expected to be opened on 12 June 2018
iii. Tentative time for signing of PPA is Mid July, 2018.