The Power Finance Corporation (PFC) is close to sealing its maiden equity deal by buying a stake in the 1,320 mw coal-based power plant owned jointly by Hyderabad-based companies-NCC and Gayatri Projects. PFC aims to buy 10-15 per cent stake for Rs 200 crore in the NCC-Gayatri project that is being set up at a total cost of Rs 7,000 crore at Krishnapatnam in Nellore district of Andhra Pradesh.
The government-owned PFC is already a lender to the project with an exposure of Rs 1,700 crore of debt. Satnam Singh, Chairman and Managing Director of PFC said that PFC has formulated a policy for equity investment in the power sector and it is looking at a couple of proposals. It has considered NCC Power's proposal and plan to invest Rs 200 crore in it.
The NCC-Gayatri project is financed by Rs 5,100 crore of debt and Rs 1,900 crore of equity, of which the two partners have so far invested Rs 750 crore in the equity of the project. In 2011, NCC, through its subsidiary NCC Power Projects, acquired 55 per cent equity stake in the Krishnapatnam power project from Nelcast Energy Corporation. Gayatri holds the balance 45 per cent stake in it.
For almost a year, the two joint venture partners have been in active talks with several potential investors including overseas utilities such as Singapore's Sembcorp and Malaysia's Genting, and local power companies like Jindal Steel and Power and Tata PowerBSE 1.08 per cent, among others. But a deal has not fructified on valuation mismatch between the developers and the investors, sector players said.