Power sector financing PFC and REC might have to overhaul portfolio

NEW DELHI.The two state-owned and largest lenders to the power sector have had a dip in their loan sanctions over the past four years. 
 
Power Finance Corporation`s (PFC`s) loan sanction are down 41 per cent from what it was in 2012-13, to Rs 44,328 crore in the past financial year. For Rural Electrification Corporation (REC), sanctions fell seven per cent in 2014-15, from 2012-13. In 2015-16, though, its loan sanctions rose to Rs 54,422 crore, owning to a rise in renewable energy (RE) projects asking for financing. 
 
Loan disbursement is showing a similar downward trend in PFC, sliding 27 per cent in the past four financial years. As for REC, the disbursement numbers are mixed — RE at zilch, negative in generation and slight growth in transmission. 
 
PFC officials said the pipeline of big-ticket generation projects was empty. As for independent power projects based on conventional fuel, 18-20 Gw capacity is without any power purchase agreement. In the past five years, no generation project has achieved financial closure, by market data. BUsiness Standard

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