Power projects under IDBI glare

Nisha Das
19 October 2001

Mumbai: The Industrial Development Bank of India (IDBI), Indias premier financial institution, is likely to withdraw its financial assistance to independent power projects, set up by major corporates like the Hindujas, AV Birla group, Videocon, RPG group and BPL, in various states.

At present, the projects are under the scrutiny of the IDBI board and a final decision will only be taken by the end of this month. The decision has been taken in order to reduce the institutions exposure in the power sector and due to the lack of a clear power policy by the government. IDBI has over Rs 15,000 crore exposure in the power sector.

IDBI officials said the institution is planning to limit its loan exposure to a power project to a maximum of Rs 100 crore. IDBI also plans to cancel the sanctioned loan disbursements worth Rs 2,750 crore to various power projects, if it feels necessary.

The projects that are under review include Videocon''s 1050mw project in Chennai, the AV Birla groups 578mw (each) projects at Bina and Rossa in Madhya Pradesh and Uttar Pradesh respectively, the BPL groups 520mw project in Andhra Pradesh, the RPG groups 500mw project in Kolkata , the NRI-promoted 370mw Vermagiri project in Chennai and the Hindujas 1,000mw project in Andhra Pradesh.

IDBI had sanctioned Rs 550 crore to Videocon, Rs 1,000 crore to the Birla group, Rs 400 crore to BPL, Rs 300 crore to the RPL group, Rs 700 crore to the Hindujas and Rs 220 crore to the Vermagiri project.

The other projects under review include Gujarat Energy Development Corporations 150mw project and Gujarat Mineral Development Corporations 250mw project. IDBI sources said these power project have failed to achieve a financial closure due to various reasons. For some of the projects, we even extended its support by enhancing the credit limit, but the cash-starved electricity boards could not provide necessary support to these projects.