Anticipating clearances for a clutch of its project proposals from the government,
NHPC, the country’s largest hydro power producer, will soon seek shareholders’ approval for enhancing its borrowing limit by R4,000 crore. The company is also seeking their permission through postal ballot to
mobilise R2,500 crore from the markets by issuing non-convertible debentures (NCDs).
NHPC has an approved borrowing limit of R20,000 crore but almost R18,000 crore of this window has already been exhausted. The company now wants to take prior shareholder approval for additional borrowing so that it can start work on the projects as soon as they get clearance.
The company has an installed capacity of 6,507 MW, and projects under construction to the tune of 3,290 MW. Besides, around 10 projects worth about 8,801 MW are awaiting government clearance. Once these projects get going, NHPC would require to mobilise over R50,000 crore quickly.
“We are seeking shareholders agreement to enhance our borrowing limit by R4,000 crore at the annual general meeting of the company in September. This will give us the cushion to mobilise funds quickly once clearances for several of our projects come”, NHPC’s director finance ABL Srivastava told FE.
NHPC, which reported a 14% jump in net profit at R616.03 crore in the three months ended June 2014, is facing severe delays in two projects– the 2,000 MW Subansiri Lower project which has been stalled since December 2011 over protests by anti-dam activists and the Teesta Low Dam-IV project that has been stuck after a contractor stopped work on it from March 20, 2013. Its other projects in the pipeline in Arunachal are also facing delays.
NHPC is also diversifying in a big way into thermal and solar power projects that have relatively shorter gestation period and lesser delays. It is eying several projects in these segments and thus feel the need to be prepared with adequate financing.