Power Finance Corporation (PFC), on Friday, announced that it would join hands with Tata Capital to set up a $1 billion power equity fund which will focus on financing for domestic power projects.

“We are in talks with Tata Capital for setting up a power equity fund,” PFC Chairman and Managing Director Satnam Singh told reporters here.

In the proposed fund, PFC would have 49 per cent equity and the remaining shareholding would be owned by Tata Capital.

The fund is likely to be finalised in the next 3-6 months. PFC and Tata Capital would form a joint venture company, with an initial corpus of $300 million which would be gradually increased to $1 billion. “We have sanctioned Rs.2,200 crore to Videocon for their overseas oil assets as they have assured us that majority of the output from those international assets would come to India,” Mr. Singh said.

Videocon’s oil fields in Mozambique are likely to start production in the next three years. On the other hand, PFC posted 33 per cent rise in net profit to Rs.1,084 crore for the quarter ended September 30, 2012.

The company had reported a net profit of Rs.812 crore in the corresponding period of last financial year. Total income rose to Rs.4,190 crore during the quarter under review, from Rs.3,150 crore in the year-ago period.

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