PTC India Financial Services recently said it has tied up with banks that will provide loans to companies engaged in renewable energy (RE) production. These banks, based on letter of comfort issued by PFS, will issue letter of credit (LC) to project companies in the renewable space with diligence on certain parameters, the company said in a release. “It is yet another innovative financing instrument evolved by PFS whereby RE projects (financed by PFS) may not be required to approach individual bank for their non-fund based financial requirements, specifically letter of credit,” said Ashok Haldia, MD and CEO, PTC India Financial Services.
Such project companies are required to approach various banks and negotiate various associated costs for issuance of letter of credit, which generally takes 3-5 months, it said. Under the new arrangement, LC can be opened in a much shorter time on a case-to-case basis and project companies shall not be required to separately pursue with each bank, PFS said.Haldia expects the tie-up to come as a great relief for RE projects which have a low gestation period. He said it will help developers focus more on project execution with a focussed approach.
A subsidiary of PTC India, PFS provides loans to companies in the energy chain.The stock of the company closed 0.42 per cent up at Rs 35.60 on BSE.