LIC finance for Bengal's power network upgrade
Insurance behemoth LIC is all set to provide Rs 140 crore as financial assistance to the West Bengal government for beefing up the state’s power transmission network.
By Sutanuka Ghosal, TNN |
KOLKATA: Insurance behemoth LIC is all set to provide Rs 140 crore as financial assistance to the West Bengal government for beefing up the state’s power transmission network. This fresh credit line will be given to the West Bengal State Electricity Transmission (WBSETCL), one of the two state-owned entities formed after unbundling of the erstwhile West Bengal State Electricity Board (WBSEB).
When contacted, MK De, chairman and managing director of WBSETCL said: “We are negotiating with LIC for a fresh line of credit. Post-restructuring, our financial position has improved. Which is why, a lot of banks and FIs are approaching us. We hope to avail of LIC’s loan shortly.”
The roadmap worked out by WBSETCL for upgrading and modernising the state’s transmission network envisages an investment of Rs 400-500 crore each year for the next two to three years. “Almost 90% of this fund requirement will be met through loans and the rest 10% will come from internal accruals. Apart from LIC, we are also talking to Power Finance Corporation and Rural Electrification Corporation for providing financial assistance,” Mr De added.
Mr De, who also heads West Bengal State Electricity Distribution Co Ltd, the distribution arm formed by bifurcating WBSEB, has also drawn up a similar strategy to beef up the state’s power distribution framework. Like WBSETCL, the distribution arm too will invest Rs 400-500 crore annually for the next three years. The funding pattern is almost similar to that of WBSETCL.
Commenting on the performance of WBSETCL, he added the revenue will cross Rs 6,000-crore mark in the current fiscal. Incidentally, the erstwhile WBSEB had earned a revenue of Rs 5,600 crore in 2006-07. However, the profit is expected to suffer a setback as power trading in the current fiscal has been much lower compared to 2006-07.
“The state has hardly any peak power for trading. In 2006-07, WBSEB had earned a trading profit of Rs 1,000 crore. We may earn Rs 500 crore trading profit this fiscal. Therefore, our profit will suffer to some extent,” he pointed out.
When contacted, MK De, chairman and managing director of WBSETCL said: “We are negotiating with LIC for a fresh line of credit. Post-restructuring, our financial position has improved. Which is why, a lot of banks and FIs are approaching us. We hope to avail of LIC’s loan shortly.”
The roadmap worked out by WBSETCL for upgrading and modernising the state’s transmission network envisages an investment of Rs 400-500 crore each year for the next two to three years. “Almost 90% of this fund requirement will be met through loans and the rest 10% will come from internal accruals. Apart from LIC, we are also talking to Power Finance Corporation and Rural Electrification Corporation for providing financial assistance,” Mr De added.
Mr De, who also heads West Bengal State Electricity Distribution Co Ltd, the distribution arm formed by bifurcating WBSEB, has also drawn up a similar strategy to beef up the state’s power distribution framework. Like WBSETCL, the distribution arm too will invest Rs 400-500 crore annually for the next three years. The funding pattern is almost similar to that of WBSETCL.
Commenting on the performance of WBSETCL, he added the revenue will cross Rs 6,000-crore mark in the current fiscal. Incidentally, the erstwhile WBSEB had earned a revenue of Rs 5,600 crore in 2006-07. However, the profit is expected to suffer a setback as power trading in the current fiscal has been much lower compared to 2006-07.
“The state has hardly any peak power for trading. In 2006-07, WBSEB had earned a trading profit of Rs 1,000 crore. We may earn Rs 500 crore trading profit this fiscal. Therefore, our profit will suffer to some extent,” he pointed out.
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