Power Finance Corporation, which recorded its maiden quarterly loss (Rs 3,409 crore) in the three months ended March, is planning to diversify by foraying into transmission and distribution.
Power Finance Corporation (PFC), which recorded its maiden quarterly loss (Rs 3,409 crore) in the three months ended March, is planning to diversify by foraying into transmission and distribution. In the face of tapering interest in thermal generation, the company is seeking to aggressively penetrate into funding renewable energy projects. The power industry lender’s accounts got affected in the quarter mainly because of RBI’s new restructuring norms. Under the new system, power generation loans of Rs 23,309 crore were downgraded as non-performing assets (NPAs) and Rs 35,995 crore into restructured assets.
PFC believes that 79% of these NPAs would be upgraded to standard assets in FY18 itself. The company is optimistic because all the projects are owned by the government, and have 100% power purchase and fuel supply agreements.
However, as no new thermal projects are being conceived by state utilities and private developers, PFC is planning to train its focus on renewable energy projects, transmission and distribution. To tap the burgeoning market of renewable energy, PFC intends to increase its disbursements to renewable projects through fresh funding and debt refinancing. Rajeev Sharma, chairman and MD, said PFC plans to sanction Rs 5,000 crore for renewable projects in the ongoing financial year.