PFC Approves ₹1.17 Trillion Worth Projects for DISCOMs Under RDSS Program

The company has approved ₹70 billion worth of loans under the Late Payment Surcharge program


Government-owned Power Finance Corporation (PFC) has approved projects worth over ₹1.17 trillion (~$14.04 billion) for various state distribution companies (DISCOM) under the Revamped Distribution Sector (RDSS) Program as of September 2023.

The public sector lender has also approved loans worth ₹70 billion (~$8.4 billion) and disbursed ₹31 billion (~$3.7 billion) under the Late Payment surcharge (LPS) program, fetching the DISCOMs more than a 50% reduction in legacy dues.

During the recent quarterly earnings call, the company stated that out of the total approved amount under the RDSS program, 53% or ₹620 billion (~$7.44 billion), has been earmarked for the installation of smart meters worth ₹100 million (~$1.2 million) and the balance for loss reduction volume.

PFC and REC are the nodal agencies for implementing both the government programs- LPS and RDSS programs – focused on the DISCOMs’ modernization, improving operational efficiencies and financial health.

During an interview with Mercom India, P K Sinha, ED (Projects) at PFC, spoke about the clause placed by the government for the DISCOMs to reduce their Aggregate Technical and Commercial losses to 12% from 15% if they were to be eligible for funds under the RDSS program.

According to the National Electricity Plan, approximately ₹33 trillion (~$396 billion) worth of investments are required by 2032 in the power sector. The company claimed it is currently the largest lender of renewable sectors and has backed 25% of the current installed renewable capacity in the country.

While responding to a question, Parminder Chopra, chairperson and Managing Director of PFC, said, “Going forward, we expect to maintain a similar share for energy financing in the power sector.”

In the previous quarter, the company diversified its borrowing profile and issued its first three-year zero-coupon bond and raised ₹4.8 billion (~$57.6 million), and also managed to raise ₹28 billion (~$336.02 million) through its second public issue of table bonds.

In March of this year, PFC signed a loan agreement with the Japan Bank for International Corporation for a ¥2.6 billion (~$20.2 million) facility, which will finance its renewable energy portfolio and offer competitive rates for the same.

The company has announced a net profit of ₹66.28 billion (~$795.5 million) during the second quarter of the financial year 2024, registering a 26.7% year-over-year (YoY) increase.  PFC posted an income of ₹224.04 billion (~$2.69 billion), an increase of 15.9% YoY.