Power Finance Corporation (PFC) on Friday said it has entered into loan agreements worth more than Rs 2.37 trillion with 20 companies in the clean energy space.
“Our share of loans to renewable energy projects is going to increase. This much I can say. It (the pace of growth) will depend on the opportunities available,” PFC chairman and managing director Parminder Chopra said, adding that the current renewable energy portfolio of PFC is around 12-13%.
The state-run company has signed deals with firms including Adani Group, Greenco, ReNew Power, Continuum, Avaada, JBM Auto, Rajasthan Renewable Energy and Megha Engineering and Infrastructure, among others. The MoUs were exchanged at an event held on the sidelines of the G20 summit in Goa.
“Going forward, we see a lot opportunities in the renewable space. PFC will have a specific focus on these areas,” she said.
The company is specifically looking to fund projects like offshore wind, pumped hydro storage, solar modules and cells, among others, in the clean energy space.
At the recent G20 meetings, Prime Minister Narendra Modi announced that India aims to produce around 50% of India’s total energy requirement through non-fossil sources by 2030.
Apart from power, the government has allowed the company to allocate up to 30% of its loan book to the infrastructure sector. “While our focus will remain on the power sector, we will gradually increase funding to the infrastructure sector. These may include refineries, airports, metros, refineries etc,” she said.
The company’s consolidated loan book rose 13% year-on-year (y-o-y) to Rs 8.6 trillion as on March 31. On an average, it aims to disburse loans worth `85,000 crore in 2023-24 (April-March), similar to the previous financial year.
Gross non-performing asset ratio fell to 3.66% as on March 31 from 5.02% a year ago.
Recently, the company announced that it will raise `5,000 crore through the public issue of secured non-convertible debentures. The tranche I issue of the debentures is for a base issue size of `500 crore with a green shoe option of up to `4,500 crore.
The tranche I issue opened on Friday, and will close on July 28.
Out of the net proceeds of the tranche I issue, at least 75% will be utilised for onward lending, and debt servicing whereas up to 25% will be used for general corporate purposes.
Overall, the company is looking to borrow `18,000 crore in 2023-24.
As of March 31, the company’s total borrowings stood at `3.6 trillion. Around 80% of the non-bank lender’s borrowings comprise of private placement and foreign currency borrowings. The remaining 20% is made up of term loans.
ReNew Energy Global said on Friday that it has signed MoUs worth `64,000 crore(about $7.8 billion) with PFC and Rural Electrification Corporation (REC) for its green energy projects. ReNew will receive `32,000 crore (about $3.9 billion) each from PFC and REC for financing its current and upcoming energy transition projects.
Kailash Vaswani, president, corporate finance, at ReNew, said, “These MoUs will help us meet our current and future financing needs and demonstrate ReNew’s ability to raise long-term financing for large-scale green energy projects.”
PFC is a leading financier of energy transition in India. The MoUs assume significance in the backdrop of ongoing deliberations on energy transition under India’s G20 presidency. PFC enjoys the unique advantage of providing funds for longer tenure at competitive rates and taking larger exposures.