Power Finance Corporation (PFC) of India announced the formation of a subsidiary to focus on renewable energy projects and their funding in November last year.
New Delhi-based PFS – incorporated in 2006 – is the investment arm of power trading firm PTC India Ltd. PFS invests in projects, fuel sources, related infrastructure like gas pipelines, LNG terminals, ports, equipment manufacturers like transformers, conductors, insulators, cables etc.
We had mentioned in February this year that , IFC was planning to provide $50 Mn loan to PTC India Financial Services Ltd (PFS), which will be used for lending to companies and projects in the renewable energy space in India.
According to reports, state-owned Power Finance Corporation is planning to float a subsidiary, Power Finance Corporation Green Energy Ltd, to finance the renewable energy projects in the country.
“We have already received a certificate of incorporation from the government for floating this subsidiary and we will begin operation soon,” R Nagarajan, director (finance) of PFC, told reporters.
Last financial year, PFC had sanctioned around Rs 3,000 crore to various projects under the renewable energy segment and disbursed around Rs 1,800 crore during the period.
“Loan disbursements to the renewable energy sector will be higher than that seen during the last fiscal as there are sound interests shown by both private and public players in this vertical,” he added.
India has an aggregate installed capacity of 18,655 Mw of renewable energy projects of the estimated potential of 84,776 Mw. Under the Jawaharlal Nehru National Solar Mission, the country aims to produce 20,000 Mw of grid connected solar power by 2022.
“We have strategically increased our focus on renewable energy projects, including solar, wind, biomass and small hydro projects to capitalise on the focus on the renewable energy initiatives,” he said.
He also said that the number of projects under the solar mission would come for financial closure in the near future.
Barring a separate subsidiary in the renewable energy space, PFC will also enter the debt syndication space.
“We have acted as the lead financial institution for several projects. We intend to increase our focus on debt syndication activities in the power sector and are waiting for approval to start operations in this segment,” Nagarajan said.