The power distribution sector as well as renewable energy are set to dominate the lending portfolio of Power Finance Corporation (PFC) during FY25.
Addressing a media conference in Mumbai on May 15, 2024, Ms Parminder Chopra, Chairman & Managing Director, PFC, said that power distribution and renewable energy will be focus areas for PFC in the current fiscal year (FY25) even as it will explore other lending avenues.
Discussing PFC’s performance in the fiscal year ending March 31, 2024 (FY24), Ms Chopra said that out of the total Rs.1,57,000 crore that PFC disbursed in FY24, around 40 per cent was towards power distribution, while power transmission accounted for 7 per cent. Another 40-45 per cent was in the power generation segment.
The PFC CMD reposed confidence in the government’s focus on reforms in the power distribution sector and reflecting this, PFC was also expecting that a large part of its lending would be to the power distribution sector, apart from another important area – renewable energy.
“In FY25, the lending mix would depend on what the available avenues are. We are looking for some funding even for thermal power projects. However, power distribution and renewable energy are going to be focus areas,” Ms Chopra said.
Lending to the power distribution sector would largely be in the form of counterpart lending for projects under the Revamped Distribution Sector Scheme (RDSS), the CMD said.
It may be mentioned that PFC has now started lending to infrastructure projects, outside the power value chain. Currently, PFC has a portfolio of 17 such infrastructure projects with total sanctions of Rs.82,000 crore with Rs.7,000 crore actually disbursed.
Speaking of non-performing assets (NPA), the PFC CMD said that 21 projects with aggregate exposure of around Rs.16,000 crore have been classified as NPAs. Of these, 13 projects have been referred to National Company Law Tribunal (NCLT) while the remaining eight, involving around Rs.2,200 crore, were outside the NCLT ambit.
When asked if this NPA portfolio had projects from the power T&D sector, Ms Chopra explained that barring a relatively small exception –Sinnar Power Transmission Ltd– the NPA portfolio was largely non-power T&D.
Role as bid process coordinator
It may be mentioned that PFC, through its subsidiary PFC Consulting Ltd (PFCCL), is also a bid process coordinator (BPC) for both interstate and intrastate transmission system schemes, for which bidder selection takes place through the tariff-based competitive bidding (TBCB) route. Discussing this role, Rajiv Ranjan Jha, Director – Projects, PFC, said that currently there was a shelf of 7-10 such projects that are pending transfer to the selected developer. Jha also emphasized that PFC was in discussion with several state governments encouraging them to adopt the TBCB route for developing their intrastate transmission network.
