NEEPCO is having second thoughts about raising External Commercial Borrowing (ECB) due to the present volatile movement of the US Dollar vis-a-vis INR. Earlier NEEPCO had plans to mobilize Rs. 600 Crores (USD 100 million) in the form of Commercial Borrowings for the 101 MW Tripura Gas Based Power Project and the 46 MW Agartala Gas Turbine Project – Expansion.
NEEPCO had floated a Request for Proposal (RFP) requesting quotes of an All-in-annualised cost over and above the 3-months LIBOR for an ECB with a maturity of 10 years with quarterly repayment of principal installments as well as interest payments. State Bank of India (SBI) had won the mandate which had offered the lowest All-in-annualised cost of 3-months LIBOR plus 3.51285%. In fact the Board had approved the hypothecation of the project assets as it has been decided that the security for the ECB facility would be in the form of hypothecation of the project assets created.
However, due to volatility in foreign exchange market NEEPCO is again evaluating its option. A decision may be taken within a month, whether to go ahead with the ECB or to resort to domestic borrowing of equivalent amount.