As focus on hydroelectric power is restored, nhpc braces itself to unleash its full potential as the nodal hydel body in the country Yogendra Prasad, chairman and md of National Hydro Power Corporation, is a man in hurry. He has reasons to be. For a long time and especially since he became the youngest boss of an organisation which had seen itself being relegated to the back seat in the energy planning of India, he has been wanting to restore the focus to the hydroelectric-ity sector. And also to prove to the world that his organisation, indeed, is the one which is best-equipped to harness the hydroelectric potential of the country. With government announcing the 50,000mw hydro power initiative and the Planning Commission attributing around 30 per cent of future capacity addition to the hydro sector within the target of 100,000 mw additional capacity by 2012, in which nhpc will play the nodal role, the policymakers seem to have finally given Prasad an opportunity to fulfill one of his career dreams. And though he is modest enough not to brag about it, he has had a large part in restoring the hydro sector to importance. And the power reservoir that nhpc is now knows that the time to unleash its true potential has arrived. "We are ready to deliver," says Prasad. In the redrawn power road map of the country nhpc has been given the task of adding 4,357 mw in the 10th Plan and 14,208 mw in the 11th. At present its installed capacity is 2,475 mw, so by the end of the 10th Plan (2007) it is likely to touch 6,532 mw. To meet the targets of the two plans nhpc will require nearly Rsl lakh crore of funding. In the approved 10th Plan, an outlay of Rs32,200 crore has been considered for nhpc. The expenditure is to be met partly from budgetary support of Rsl4,200 crore and balance through borrowings of Rsl6,400 crore, internal resources of Rsl, 100 crore, and remaining balance Rs500 crore from other sources. So how does nhpc hope to meet the non-budgetary fund requirements? Is scouting around for funds going to be a problem? Finance director S.K. Garg envisages no such hindrances. "We have already tied up with various institutions to fund our projects under the 10th Plan. Moreover, given our sound financial performance, the availability of funds will not be an issue," he says. A Rs9,000 crore 20-year term loan with a moratorium of eight years has already been tied up with lic, and there will be more depending on the need. nhpc is also the first in India to avail itself of a nexi (Nippon Export & Investment Insurance) untied facility equivalent to $150 million under credit insurance cover from nexi of Japan for one of its projects. "We have also taken an ecb equivalent to $50 million without any security or guarantee at a very competitive rate," Garg adds. nhpc projects that it will require Rs66,000 crore in the 11th Plan, the funding of which could be Rsl5,000 crore from equity, Rs43,000 crore from borrowings, and Rs8,000 crore from internal resources. Garg also does not rule out the ipo route for funding future projects. "Encouraged by the overwhelming response to ntpc's recent ipo, we may also hit the market through the ipo route in the foreseeable future." He, however, points out that the final decision in this regard has to come from the government. If the government only decides to go ahead with the disinvestment, all the money raised will go into the government coffers. If some money has to go into the nhpc kitty, the government will have to decide on a dual issue of fresh equity being issued other than the government's share. There is, however, little doubt that the ipo, whenever it comes, will be a big draw, nhpc has been a profit-making entity and over the years has consistently improved its financial position. For 2003-4 it recorded a net profit of Rs621.38 crore on all-time high sales of Rsl,414.43 crore, as against Rs510.5 crore on Rsl,324.86 crore in 2002-3, representing a 22 per cent jump in profit. With financial reforms in the sector the company has also improved its collections considerably. "With the implementation of Montek Singh Ahluwalia committee's recommendations we have been able to recover Rs2,759 crore against principal and surcharge by way of securitisation and long-term advances received from beneficiaries," says Garg. The average sales collection period also came down to four months by the end of 2003-4 from the level of 19 months at the end of 2000-1. Further, the ratio of total realisation to total billing has also seen dramatic improvement. This rose sharply from 69 per cent in 2001-2 to 94 cent in 2002-3 and 97 per cent in 2003-4. However, Garg points out that some states have still not opened lcs against their current dues, which has become an impediment to the implementation of the Ahluwalia report in these states. Nonetheless, the principal outstanding dues have come down to a modest Rs367.62 crore at last count. The corporation has also undertaken several measures to reduce its capital and interest costs