December 03, 2008

PFC inks a MoU with KREDL for power projects in Karnataka

Projects Today reported that Power Finance Corporation has sign a MoU on August 20th 2007 with Karnataka renewable energy development to finance non conventional power projects such as wind, hydro, solar and biomass etc in Karnataka. Mr MK Goel director of institutional appraisal & development of Power Finance Corporation and Dr B Shivalingaiah MD of Karnataka Renewable Energy Development has signed the MoU in the presence of Mr HD Revanna minister for energy PWD of Karnataka and Mr Dilip Rau additional chief secretary and principal secretary of Karnataka. The MoU will be valid up to March 31st 2009.

As per the proposed agreement, Karnataka Renewable Energy Development will recommend to Power Finance Corporation financial assistance to companies proposing to execute power projects based on renewable energy such as wind, hydro and biomass. Power Finance Corporation will fund 50% of the cost at interest rates normally attributable to such projects and will also arrange the balance funds from financial institutions with which it has tied up.

PFC and KREDL shall cooperate to leverage their respective strengths and competencies built over the years for development of non conventional and renewable sources of energy, avail clean development mechanism benefits from the small scale renewable energy power projects and for promoting energy efficiency in all sectors for mutual benefit.

It is estimated that Karnataka has a potential to add 11150MW through renewable energy sources. At present, the installed capacity of electric power from non conventional renewable energy sources in Karnataka is 1630MW. In addition to this, KREDL has drawn an action plan to add 1500MW of power through renewable energy sources by the end of 11th Five Year Plan period in the state.