WASHINGTON(PTI): The world has announced approval of a 400 million dollar bank loan to India’s National Thermal Power Corporation (NTPC), the government’s main power utility, to help finance NTPC’s power generation program.

The 20year loan has a five year grace period and is at the bank’s standard variable interest rate,

The loan supports a five year time slice of NTPC’s least cost investment program of new coal and gas based power stations: NTPC’s participation in several joint venture investments with private investors: and the implementation of an Environmental Action Plan (EAP), according to a world bank press release.

Specifically, the project will help NTPC meet its targets for capacity additions through increased mobilization of funding from internal sources, domestic and foreign capital markets, and private sector joint ventures: upgrade the environmental performance of its existing power stations and make new power plants environmentally more Sustainable; and strong then its environmental and resettlement and rehabilitation management capability. According to an NTPC release in New Delhi the loan would primarily be used for expansion of the public sector company’s Vindhyachal and Rihand projects.

NTPC has finalized its comprehensive environmental action plan and rehabilitation action plan with the world bank while processing the loan strengthening the environmental protection activities in respect of its project including possible technical assistance  to NTPC’s environmental and rehabilitation an resettlement capable ties. The World Bank had approved the last loan for NTPC in 1987 for its talcher (2×500 mw) and Dadri (4×210 mw) projects. During the past six years, despite president efforts by both NTPC and the government of India, the World Bank has not approved any loan for NTPC because of sectorial issue. In the meantime, NTPC had negotiated a 375 million dollar loan with the world bank in December, 1989 for its regional power systems projects. With the approval of the above loan by the world bank for NTPC power generation project, NTPC expects to add the much needed power generating capacity in the country.

Article extracted from this publication >>  July 9, 1993