Government may allow power companies to index rupee debt with global currencies

TOKYO: The government is considering allowing power companies to index rupee debt with global currencies to attract cheaper long-tenor loans from foreign banks, Power Minister Piyush Goyal said on Thursday.

The minister has asked Japanese financial institutions to co-finance Indian power projects with state-run power sector financiers like Power Finance Corp and Rural Electrification Corp.

Leading banks of Japan including Sumitomo Mitsui Banking Corporation, Mizuho Bank, Bank of Tokyo Mitsubishi, JICA, Nippon Export & Insurance Investment and JBIC are meeting Goyal here to discuss opportunities for investing in the Indian energy sector, including in UMPPs, renewable energy and transmission and distribution projects.

Sumitomo Mitsui Banking Corporation director Rajeev Kannan said the bank is willing to offer long-term funds to Indian power plants with low risks provided the country offers stabilised policies and indexation of currencies to hedge risk.