MoP - Ministry of Power

POWER FINANCE CORPORATION LTD.(PFC)
1. OBJECTIVES & STATUS
The Power Finance Corporation Limited (PFC) was
incorporated in 1986 as a Development Financial Institution
(DFI) dedicated to Power Sector. Since then, PFC has been
playing an increasingly important role in mobilizing financial
resources from domestic and overseas sources at optimum
cost and providing various kinds of funding to power projects.
As a DFI, PFC also focuses on the institutional development
of its borrowers in the state power sector. Reserve Bank of
India registered the Corporation as Non-Banking Financial
Company in February 1997.
1.2. The Corporate Headquarter of PFC is located at New
Delhi. It has two regional offices at Chennai and
Mumbai.
1.3 The main objectives to be pursued by PFC are
enumerated in the Memorandum of Association of PFC
and are as under:-
To Finance Power Projects, in particular, Thermal
and Hydro Projects.
To Finance Power Transmission & Distribution
works.
To Finance Renovation & Modernisation of power
plants.
To Finance System Improvement and Energy
Conservation schemes.
To Finance maintenance and repair of capital
equipment etc.
To Finance survey and investigation.
To Finance studies, schemes and experiments.
To Finance other energy sources.
To Promote and organise consultancy services.
1.4 PFC’s vision is to be the lead Institution in financing
the sustainable development of Indian Power Sector
and its linkages with Global Operations.
1.5 PFC had received MoU “Excellence” Award for ( 5 )
five times for being amongst the Top 10 PSUs and
consistently rated “Excellent” by Government of India
based on MoU Performance since 1993-94 (Very
Good” in 2004-05). For FY 2006-07 also the MoU rating
is “Excellent
1.6 PFC is a Schedule “A” PSE according to the DPE
guidelines and declared a “Navratna” Company on
CHAPTER - 22.4
22 nd June 2007 by the Government of India, keeping in
view PFC’s continued impeccable financial and
operational performance and its contribution to the
development of Indian Power Sector. This feat has been
accomplished by PFC in less than a decade as it was
earlier a Mini-Ratna Category-1 PSE in the year 1998...
“Navratna” status shall provide PFC a greater flexibility
and autonomy in terms of making investment and
operational decisions. This status would help further
consolidate position in the Power Sector for meeting
the ever growing needs of Indian Power Sector.
1.7 PFC has been providing financial assistance to State
Power Utilities and Municipal Utilities, besides playing
a catalytic role in bringing about overall improvement
in the power sector performance. In line with the GOI
policy initiatives, PFC has expanded its lending portfolio
to cover the joint, central and private sector. The
corporation has widened its range of services/facilities
by introducing bridge loan, leasing, supplier’s credit
assistance for studies/consultancies/trainings, bill
discounting and rediscounting, working capital
schemes, bonds, shares, guarantee services etc.
1.8 PFC’s clients include state electricity boards and state
departments engaged in the development of power
projects (like irrigation department), state power utilities,
central power sector utilities, state power departments,
private power sector utilities (including independent
power producers), joint sector power utilities, power
equipment manufacturers and power utilities run by local
municipalities. These clients are involved in various
aspects of the generation, transmission and distribution
and related activities in the power sector in India.
1.9 Funds by PFC are not pre-allocated to the states PFC’s
funding criteria are based on borrower’s credit
worthiness and project viability.
1.10 PFC’s primary activities consist of funding power
projects and advisory services to the Indian power
utilities. Consistent with its developmental role, PFC
places emphasis on the institutional development of
state power utilities. PFC also conducts training
programs and workshops on various topics and critical
issues affecting the Indian power sector.
1.11 PFC has been enjoying highest ratings both from
domestic as well as international credit ratings agencies.
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