(ET)
Power Finance Corp (PFC) and REC Ltd have decided to offer 10-year loans to state distribution utilities at 9.5 per cent for the next 60 days under the ₹90,000 crore liquidity infusion package as the Union cabinet is likely to consider relaxing working capital borrowing limits of power distribution companies this week.
A senior government official said that PFC and REC have fixed interest rates under the liquidity package at 8.75 per cent for three-year loans, 9 per cent for five year loans, 9.25 per cent for seven years and 9.5 per cent for 10-year term loans. The interest rates will be valid for the next 60 days.
Electricity distribution companies of 8-9 states including Maharashtra for, Telengana, Andhra Pradesh, Uttar Pradesh, Meghalaya, Jammu & Kashmir and Tamil Nadu have expressed interest in borrowing the loans from PFC and REC for about ₹60,000 crore loans and are likely to complete documentation in 7-10 days.
Uttar Pradesh is likely to approach the two lenders for ₹20,000 crore, Tamil Nadu for ₹18,000 crore, Telengana for ₹12,000 crore, Andhra Pradesh for ₹6,500 crore and Maharashtra for ₹5,000 crore. Some of these states have written to the Union power ministry for relaxation of the loan disbursement rules including easing borrowing limits, he said.
