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The Competition Commission of India has announced that it has approved Power Finance Corporation’s (PFC) acquisition of 52% stake in Rural Electrification Corporation (REC). In December 2018, the acquisition received an in-principle approval from the Cabinet Committee on Economic Affairs (CCEA).

Both REC and PFC are government-owned non-banking financial companies (NBFCs) that provide financing to power projects in India.

Last year, Mercom reported on the news of this acquisition stating that the deal intended  to achieve integration across the power chain, obtain better synergies, create economies of scale and have enhanced capability to support energy access and energy efficiency by improved capability to finance power sector. The government also hopes this will allow for cheaper fund raising with increase in bargaining power for the combined entity.

The government’s shareholding in PFC and REC has reduced by approximately five percent between the September and December quarters last year.



Mercom had reported in June 2017, the PFC was 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.

In July 2017, the Rural Electrification Corporation of India raised $450 million (~₹28.93 billion) through the sale of green bonds on the London Stock Exchange. In November 2018, REC raised $700 million through initial foray of its $5 billion global medium-term-note (GMTN) program into the 144a market (US Securities and Exchange Act 1933). REC had launched its $5 billion GMTN program on the Global Securities Market (GSM) in October 2018.

In March 2018, Power Minister R.K. Singh directed REC and PFC not to grant loans to distribution companies which were making heavy losses (above 15 per cent) unless they chalk out a plan to reduce them. The minister noted that many DISCOMs have been making heavy transmission and distribution (T&D) losses and it may be difficult for them to repay the loans.