At a time when power companies are facing stress in managing debt, state-owned Damodar Valley Corporation has successfully swapped a Rs 2633-crore high cost existing project loan with SBI to save on interest cost.
"We have repaid the remaining project loan of Rs 2633 crore of the Power Finance Corporation with a new loan from SBI that lowers our interest cost to 10.6 per cent from 12.5 for our 1000 MW (500x2) Koderma thermal power project," DVC Director (Finance) T K Gupta.
Over the next 10 years, DVC would save a substantial amount, he said.
One unit of Koderma 500MW has been commissioned and another will be commissioned in the next few days.
Gupta said the company is aiming to swap another project loan of Rs 3,000 crore with a low cost one on similar lines.
"We will share the details once we complete the deal," he said.
DVC chairman R N Sen said in the past the company has switched to low cost loan when a thermal project is commissioned.
During project implementation period, banks normally do not prefer or lend at higher rate due to execution uncertainty risk.
When a project gets commissioned, banks agree for credit at cheaper rate as risk is minimised.
DVC registered a net profit of Rs 392 crore in 2012-13.
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