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PFC Sanctions More Loans for Renewable Energy Than Conventional Power in FY25

In the December quarter of FY25, distribution accounted for 60% of PFC’s total disbursements.
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Power Finance Corporation (PFC), a state-run non-banking financial company, has sanctioned more loans in the Renewable Energy (RE) generation segment than in conventional power generation in the financial year 2024-25 (FY25).

PFC’s total loan sanctions so far in FY25 stood at Rs 2,52,000 crore, as disclosed by Chairperson and Managing Director (CMD) Parminder Chopra during a recent quarterly investor call. Of this, Rs 90,000 crore has been allocated to the RE power generation segment, accounting for 35.71% of total sanctions. Meanwhile, loans sanctioned for the conventional power segment stood at Rs 66,240 crore, making up 26.29% of total sanctions. Overall, power generation comprised 62% of PFC’s total loan sanctions for the fiscal year.

Loan Distribution Breakdown

CMD Parminder Chopra elaborated on the loan distribution, stating, “If we bifurcate the Rs 2,52,000 crore, approximately 62% is allocated to power generation (both RE and conventional), 16% to distribution, 7% to transmission, and 9% to infrastructure.”

No Funding for RE Projects Without PPAs

Addressing investor concerns about RE projects lacking Power Purchase Agreements (PPAs) with power distribution companies (DISCOMs), Chopra assured that PFC has not funded any RE asset without a signed PPA. She stated, “While there have been reports of RE capacities lacking PPAs, let me assure you that we have not financed any such asset. Our disbursements this quarter have been focused primarily on the renewable and distribution segments.”

Distribution Sector Takes Priority in Disbursements

In the December quarter of FY25, distribution accounted for 60% of PFC’s total disbursements. Chopra highlighted that PFC plans to continue prioritizing distribution in the upcoming quarter, followed by the generation sector. So far, the company has disbursed Rs 16,000 crore in the current financial year, with more disbursements in the pipeline for the coming months.

Positive Momentum in RDSS Implementation

Commenting on the Revamped Distribution Sector Scheme (RDSS), Chopra acknowledged its initially slow implementation but expressed optimism about its progress. “Initially, RDSS required multiple procedural steps, which led to delays. However, 94% of sanctioned work related to distribution improvements and 90% of smart metering projects have been awarded. With contracting completed, we anticipate positive disbursement momentum as execution gains pace,” she stated.

PFC’s shift towards financing renewable energy reflects India’s push for sustainable power solutions and its commitment to clean energy transition. The company’s strategic funding allocations are expected to play a crucial role in transforming the nation’s power sector.


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