The Power Finance Corporation (PFC), a government owned financial Institution, is planning to shift its investments away from conventional energy and towards renewable energy projects, last-mile transmission and distribution projects in addition to making existing thermal units more energy efficient and refinancing of old projects. The PFC is planning to finance power transmission projects awarded to private transmission project developers, through tariff based competitive bidding. Lagging power demand and rising non-performing assets (NPAs) in the thermal power sector has pushed it to revamp its lending portfolio.
PFC’s non-performing assets (NPAs) increased by 300 percent to Rs 307.18 billion (~$4.76 billion), mostly on account of change of RBI norms which caused a large number of loans to be reclassified as bad loans or restructured assets. PFC reported a quarterly loss of Rs 3,409 crore during Q4FY17. For the fiscal year 2016-17, the profit fell by 65 percent in a year to Rs 2,126 crore due to extra provisioning for loans, according to the Business Standard.
Image credit: Power Finance Corporation