Latest in the series of good news for power sector, recently Reserve Bank of India (RBI) has announced that it will issue guidelines to allow external commercial borrowing (ECB) by power producers to retire their rupee debt with Indian banks in next seven days.
This move came from the announcement by Hon’ble Finance Minister Mr. Pranab Mukherjee in the Budget 2012-13 to allow power sector companies refinance their rupee debt with cheaper funding from ECB and thereby opportunity to expand their loan portfolio with banks to muster funds required for their expansion and new projects.
Several banks and financial institutions have reached the sectoral exposure limit allowed by RBI for the power sector there putting pressure on power sector companies to mobilise funds from the domestic market.
The RBI will also issue guidelines to allow ECB for making capital expenditure on the maintenance and operations of toll systems for roads and highways.
The remaining decisions on ECB financing announced in the Budget would be taken up separately by RBI at a later stage.
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