Shillong, Sept 22: The Meghalaya Cabinet has approved a proposal for floating of bond of Rs 800 crore by the Meghalaya Energy Corporation Limited (MeECL).

To allow the MeECL to float the bond, the State government has decided to extend the bank guarantee of Rs 1,175 crore for the MeECL but the Corporation has to surrender an unutilized amount of Rs 595 crore.

The bond would be issued jointly by the Meghalaya power department and the MeECL and the tenure of the bond is 10 years.

Sources said that the objective of floating the bond was help the MeECL generate fund to repay loans it has borrowed at high rate of interest.

Sources said that an agency which will be selected through a national competitive bidding would float the bond for the MeECL.