Damodar Valley Corp ropes in funding agencies for expansion

KOLKATA: Damodar Valley Corporation (DVC) is in talks with Germany-based multilateral funding agency KfW Bankengruppe and World Bank body International Finance Corporation (IFC) for long-term soft loans to fund its expansion and modernisation plans.

The state-owned power generating company has also received commitments on external commercial borrowings of $400 million through State Bank of India, Bank of Baroda and Bank of India. “These banks will arrange for ECBs through their foreign branches. DVC has, in fact, already received RBI’s clearance for raising $500 million every year through ECB. This will go into funding expansion plans. In 2008-09, we intend to raise another $500 million through the ECB route,” senior DVC officials told ET.

Currently, DVC is poised to receive e45 million from KfW for renovation and modernisation of its three existing units at Bokaro Thermal Power Station. Units 1, 2 and 3 with capacities 210 MW each will be renovated with the fund.

DVC, is however, also in talks with KfW for funding three units of 130 MW each at Chandrapura, and two units of 140 MW & 210 MW at Durgapur. These are also intended to be sourced in the form of soft loans.

Nevertheless, talks with IFC are also on for soft loans that will fund the current expansion plans. “We are also in talks with KfW for getting commercial loans for funding some of DVC’s expansion projects,” the official said.

Currently, the company has plans to develop 4,700 MW fresh capacity in the 11th Plan Period. The power major has lined up a Rs 24,000 crore investment plan in the 11th Five Year Plan period. It has also roped in Power Finance Corporation (PFC) to part finance its 1000 mw greenfield thermal power project at Raghunatpur in West Bengal.