Power sector lender Power Finance Corporation said that it has approved a proposal to launch a private equity fund of USD 1 billion, which could possibly be in place over the next six months.

Mr Satnam Singh CMD of PFC after the board meeting said that "Our board has approved a proposal to launch a private equity fund and also given approval to select a partner for this fund, which will be of an overall USD one billion.”

Mr Singh said that "Initially, we shall start with USD 300 million. The process that follows will be that we first select a partner for it, make a trust, make a asset management company, this may take around six months time.” He added that "We shall be contributing to the trust to the extent of five per cent. Our board meeting held here today has taken a call that we will go for a tender for selecting a partner for this private equity fund.”

Mr Singh said that "We specialize in lending to power projects but we do not have expertise in fund management. Therefore, we thought through synergy with partner's core competence in fund management, we can launch the fund jointly.”

He said that "The tender to select an Indian partner for the fund shall be out soon. For banking, we are in the process of advertising and are still looking to hire a consultant.”

PFC has entitlement for raising INR 6,900 crore from Infra bonds, and 5,000 crore from tax free bonds. So far, it has raised INR 425 crore from tax free bonds and INR 90 crore from Infra bonds in first tranche.

(Sourced from ET)