October 11, 2008

PFC inks MoU with RITES to expertise import of African coal

Power Finance Corporation Limited announced that it has signed a MoU with RITES Limited on March 27th 2008, whereby both the parties have agreed to combine their resources and expertise to the facilitate import of coal from African countries and elsewhere to address the problem of power deficit in India.

Under the agreement, both the parties are desirous of combining their resources and expertise to facilitate import of coal from African countries and elsewhere, subject to the parties reaching a mutually satisfactory understanding to address the problem of power deficit and to fill the demand and supply gap in availability of coal for the thermal generation plants in India.

PFC has identified funding of coal based thermal power projects as the mainstay for a long term sustainable growth of power sector and Indian economy and feels that there is a urgent need to supplement coal supplies from Indian mines that with imported coal on long term basis at competitive price. RITES, besides being a technical partner will identify the countries from where possibility of owning coal mining exists, excavation and transportation of coal is feasible for export of coal to India. RITES long overseas presence will be of immense help.

Railways constitute the major system of coal transportation in India and coal is the largest single commodity transported by the Railways. RITES being a technical arm of Indian Railways will liaison with Railway authorities for carrying and expediting sectoral studies, development of suitable plans and ensure adequate rail network for coal movement, development of new rail links with Ports connectivity.

Both the parties shall make joint efforts with concerned agencies for augmentation of port capacity to meet the increased demand, early completion of the existing projects and Port connectivity through seamless hinterland road and rail development to meet requirement of imported coal. Provide advisory services to Indian companies in acquiring mining rights. SPV, if required, would be formed which would along with local company acquire mining rights, out source the mining of coal and import the same to India for selling. Other Indian / foreign partners could also join the SPVs to be formed for the above objective, with the mutual consent of PFC and RITES whenever required.