The Hindu Business Line : Rs 1,600-cr German loan for VTPS unit

THE power sector in Andhra Pradesh has got a shot-in-the-arm with the German Government sanctioning a loan of Rs 1,600 crore to the State for constructing a 660 MW unit at Vijayawada Thermal Power Station State-IV (VTPS).

A loan agreement was signed between Kreditanstalt fur Wiederaufbau (KfW) of Germany and the Union Government on Saturday in New Delhi. The loan proposal was pending since 1997.

Following the signing of the loan agreement, KfW and the State Government signed Project Agreement and Arbitration Agreements.

Disclosing this at a review meeting here on Sunday, Mr Deepak Kumar Panwar, Principal Secretary (Energy Department, Government of Andhra Pradesh) and Chairman of APGenco, said decks had been cleared for the establishment of the unit that would increase the VTPS capacity to 1,920 MW in three years.

About 30 per cent of the loan (Rs 480 crore) was in the form of grant, an APGenco press release said.

The first instalment would be drawn in May next when the project work would commence.

Mr Ajay Jain, Managing Director of APGenco, said the utility lined up at least five projects for completion in the next three years.

They are (with capacity and expected dates of completion in brackets): Rayalaseema Thermal Power Project (420 MW, July 2006), Vijayawada State IV (660 MW, March 2008), Bhoopalapalli (500 MW, June, 2008), Jurala Hydro station (234 MW, March, 2007) and Pochampad (9 MW, December 2006).

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