About
Power Finance Corporation Ltd
Power Finance Corporation Ltd is a leading power sector Public Financial Institution and a Non-Banking Financial Company providing fund and non-fund based support for development of the Indian power sector. The Company is engaged in power sector financing, the integrated development of the power and associated sectors. They provide large range of Financial Products and Services like Rupee Term Loans, Transitional Financing Services, Project Term Loan, Equipment Lease Financing, Direct Discounting of Bills, Short Term Loan, and Consultancy Services etc for various Power projects in Generation, Transmission, and Distribution sector as well as for Renovation & Modernization of existing power projects.
The Company's clients include state power utilities, central power sector utilities, 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 all aspects of the generation, transmission and distribution and related activities in the power sector in India.
Power Finance Corporation Ltd was incorporated on July 16, 1986 as a public limited company. The GoI established the company as a financial institution in order to finance, facilitate and promote power sector development in India with the President of India holding 100% of the equity share capital. In December 31, 1987, they commenced their business operations. In the year 1988, they started lending activities. In the year 1990, the company was declared as a public financial institution.
In the year 1991, the company was conferred with a license to deal in foreign exchange in the power sector. In the year 1992, Project on Energy Management Consultation and Training (EMCAT) became operational with the objective to bring about improvement in the efficiency of the energy supply component of the power sector with the help of USAID. In the year 1996, the company started funding private power projects.
In the year 1998, the company was granted the Mini Ratna (Category I) status. They promoted a joint venture company, namely PTC Ltd in association with NTPC and PGCIL. In the year 1999, the company launched consultancy services in order to provide consultancy services to both state owned and private power utilities for the power and financial sectors.
In the year 2003, the company was appointed as a nodal agency by the MoP to fund the India Power Fund scheme to catalyze the process of fresh equity investment in the power sector. In the year 2005, the company entered into MoU with LIC and ten leading public sector banks for consortium financing of power projects. In the year 2006, the company incorporated seven subsidiary companies for developing UMPPs. They issued the letter of intent for the Sasan and Mundra UMPPs. In the year 2007, they incorporated their eighth subsidiary company for developing UMPP.
During the year 2006-07, the company launched their IPO and the holding of Government of India reduced from 100% to 89.78% of the paid-up equity. On successful completion of bidding process, two of the subsidiaries, Coastal Gujarat Power Ltd and Sasan Power Ltd were transferred to Tata Power Company Ltd and Reliance Power Ltd on April 22, 2007 and August 7, 2007 respectively. The company was registered as a Non Banking Financial Company by RBI and was conferred with the status of Nav Ratna by the Govt of India on June 22, 2007.
During the year 2007-08, the projects, namely Maneri Bhali U-1,3&4 (228 MW) of UTJVNL in Uttaranchal, Balimela U-7 of OHPC in Orissa and Teesta V HEP U-2 (170 MW) of NHPC in Sikkim, which were supported by the company were commissioned. The company sanctioned loans worth Rs 190 crore for R & M and Life Extension of thermal power plants. Also, they sanctioned Rs 222 crore for R&U of Hydro Power Projects.
In March 2008, the company signed an MoU with RITES Ltd (A Govt. of India Enterprise) to facilitate import of coal from African countries and elsewhere. Also, they signed an MoU with TNEB whereby PFC would finance cogeneration projects of around 250 MW planned to be set up at a cost of Rs1200 crore in various cooperative and public sector sugar mills in the state of Tamil Nadu.
In March 25, 2008, the company launched a 100% owned subsidiary company, namely PFC Consulting Ltd for providing consulting services. Also, they incorporated an advisory company namely Power Equity Capital Advisors Private Limited to provide advisory services related to equity investments in Indian power sector.
During the year 2008-09, the company established a Consortium Lending Group (CLG) with an aim to give fillip to Consortium Lending Operations, particularly through the Power Lenders' Club (PLC) which has 21 members including LIC, HUDCO and 18 Indian banks. The projects in association with the company, namely Baglihar HEP (3x150 MW) of JKPDCL in Jammu and Kashmir, Priyadarshni Jurala HEP (6x39 MW) of APPGCL in Andhra Pradesh and Varahi HEP (2x115 MW) of KPCL in Karnataka were commissioned.
During the year, the company sanctioned loans worth Rs 214 crore for R&M and life extension of thermal power plants. Also, they sanctioned Rs 48 crore for R&M of hydro power projects. Chhattisgarh State Electricity Board was reorganized / unbundled into Chhattisgarh State Power Holding Company Ltd., Chhattisgarh State Power Generation Company Ltd., Chhattisgarh State Power Transmission Company Ltd., Chhattisgarh State Power Distribution Company Ltd. and Chhattisgarh State Power Trading Company Ltd with effect from January 1, 2009. Also, the company in association with NTPC, NHPC and TCS promoted National Power Exchange Ltd with an authorized capital of Rs.50 crore.
The company was conferred with the coveted 'KPMG-Infrastructure Today Award 2008' for 'Most Admired Government Enabler - Power' category.
During the year 2009-10, the company sanctioned loans worth Rs 1,950 crore for R&M and life extension of thermal power plants. Also, they sanctioned Rs 74 crore for R&M of hydro power projects. In August 2009, Jharkhand Integrated Power Ltd. for Tilaiya UMPP in Jharkhand has also been transferred on 7th August, 2009 to Reliance Power Ltd. In November 2009, the company signed a joint venture agreement with TPC Ltd., Power Grid Corporation of India Ltd. and Rural Electrification Corporation Ltd for incorporating a Joint Venture Company with equal equity contribution (i.e. 25% each) from all the 4 CPSUs.
As on March 31, 2010, the company established twelve Special Purpose Vehicles for UMPPs to undertake preliminary site investigation activities necessary for conducting the bidding process for these projects. Ministry of Power is the 'facilitator' for the development of these UMPPs while Central Electricity Authority (CEA) is the 'Technical Partner'. These SPVs shall be transferred to successful bidder(s) selected through Tariff Based International Competitive Bidding Process for implementation and operation.
During the year 2010-11, loans worth Rs 556 crore were sanctioned for R&M and life extension of thermal power plants and an amount of Rs 562 crore was disbursed. Also, they disbursed Rs 83 crore for R&M of hydro power projects. In July 28, 2010, RBI classified the company as an Infrastructure Finance Company (IFC).
In October 2010, the company signed an MoU with NPCIL, the only player in nuclear power generation in India, for offering financial assistance to NPCIL for their new power projects as well as renovation, refurbishment and life extension projects etc.
During the first quarter of financial year 2011-12, the company made a Further Public Offer (FPO) of 22,95,53,340 equity shares of Rs 10 each. The issue included a fresh issue of 17,21,65,005 equity shares by the Company and an offer for sale of 5,73,88,335 equity shares by the President of India acting through Ministry of Power, Government of India.
In March 30, 2011, the company incorporated a wholly-owned subsidiary company namely Power Finance Corporation Green Energy Ltd to provide financial support for generating green (Renewable and Non-conventional sources of) energy. In July 18, 2011, they incorporated a wholly owned subsidiary, PFC Capital Advisory Services Ltd to syndicate and make financial arrangements for the Projects/ enterprises in the areas of power, energy, infrastructure and other industries.
During 2012, the corporation incorporated a Special Purpose Vehicle (SPV), as a wholly-owned subsidiary Company namely Deoghar Mega Power Limited. The Corporation also disbursed Rs 7,400 cr loan to 5 sick Discoms
In 2013, four Special Purpose Vehicles (SPVs) as wholly owned subsidiaries was incorporated by PFC Consulting Limited, a wholly owned subsidiary of the Corporation Limited. PFC Green Energy, a Wholly owned Subsidiary commenced operations in the month of March.
In 2014, the corporation incorporated Two (2) wholly Owned Subsidiaries of Power Finance Corporation Ltd, Cheyyur Infra Ltd and Odisha Infrapower Ltd. The Corporation decided to extend a Rs 15,000-crore loan to the Andhra Pradesh government to improve power sector infrastructure facilities and was officially announced. During the year, The Securities and Exchange Board of India granted a certificate of registration as a Debenture Trustee to PFC Capital Advisory Services Limited, a wholly owned subsidiary of Power Finance Corporation Limited (PFC).
In 2015, the corporation achieves MOU Targets of Financial Year 2014-15 for Sanctions and Disbursements. During the year, the Corporation incorporated Bihar Mega Power Limited as its wholly-owned subsidiary and also incorporated Jharkhand Infrapower Ltd as a wholly owned subsidiary of the corporation.
On 27 July 2015, Government of India offloaded 6.6 crore equity shares, representing a 5% stake in Power Finance Corporation via Offer for Sale through the stock exchanges mechanism. After the stake-sale, Government of India's holding in PFC declined to 67.8% from 72.8%.
On 21 April 2016, Power Finance Corporation informed the stock exchanges that Odisha Generation Phase-II Transmission Limited, a wholly owned subsidiary of PFC Consulting Limited (wholly owned subsidiary of Power Finance Corporation Limited) established for development of common transmission system for phase-II generation projects in Odisha, has been transferred to M/s Sterlite Grid 3 Limited (the successful bidder).
On 2 June 2016, Power Finance Corporation Ltd (PFC) announced that it has acquired 23.32% stake in Shree Maheshwar Hydel Power Corporation Limited (SMHPCL) upon invocation of shares pledged by SMHPCL's promoters and upon partial conversion of sub debt loan to SMHPCL. PFC decided to invoke the pledged shares following loan default from SMHPCL. PFC was one of the lenders to SMHPCL and had given loan of Rs 700 crore to SMHPCL along with guaranteeing Rs 400 crore to the bond holders of SMHPCL.
On 6 July 2016, Power Finance Corporation Ltd informed the stock exchanges that Warora-Kurnool Transmission Limited, a wholly owned subsidiary of PFC Consulting Limited (wholly owned subsidiary of Power Finance Corporation), established for development of Transmission System for 'Additional inter-Regional AC link for import into Southern Region i.e. Warora - Warangal and Chilakaluripeta - Hyderabad - KurnooI 765 kV link' Common Transmission System has since been transferred to M/s Essel Infraprojects Limited (the successful bidder) on 6 July 2016.
The Board of Directors of Power Finance Corporation Ltd at its meeting held on 14 July 2016 recommended issue of bonus shares in the ratio of 1:1.
On 15 July 2016, Power Finance Corporation Ltd informed the stock exchanges that Gurgaon-Palwal Transmission Limited (a wholly owned subsidiary of PFC Consulting Limited) established for development of Transmission System for 'Creation of new 400 kV substations in Gurgaon area and Palwal area as a part of ISTS' has since been transferred to M/s Sterlite Grid 4 Limited (the successful bidder) on 14 July 2016.
On 7 December 2017, Power Finance Corporation (PFC) announced that it has successfully closed the deal for issuance of USD 400 million Green Senior Unsecured Notes offering at a fixed rate coupon of 3.75% from the international debt capital markets under Regulation S of the U.S. Securities Act of 1933 (as amended) on 6 December 2017 and completed the formalities for listing at Singapore Exchange (SGX-ST) and International Securities Market segment of the London Stock Exchange.
Pursuant to the order of Ministry of Corporate Affairs dated February 5, 2019, PFC Capital Advisory Services Limited (PFCCAS, a wholly owned subsidiary of the Company) was amalgamated with PFC Consulting Limited, wholly owned subsidiary of the Company w.e.f. the appointed date i.e. April 1, 2018. Further, pursuant to the order of Ministry of Corporate Affairs dated February 7, 2019, PFC Green Energy Limited (PFCGEL, a wholly owned subsidiary of the Company) got amalgamated with the Company from the appointed date i.e. April 1, 2017.
During the year 2018-19, the Company acquired 52.63% shareholding held by the President of India in REC Limited (REC) at Rs 139.5036 per share for a total cash consideration of Rs. 1,44,99,99,50,186/- on March 28, 2019. By virtue of this investment, the Company became the holding company of REC and REC became subsidiary of PFC. Further, since PFC acquired REC on March 28, 2019, the holding of REC in Energy Efficiency Services Limited (EESL) i.e. 21.70% which when combined with PFC's share in EESLi.e. 36.36% amounts to 58.06%. Accordingly, company has since become the holding company of EESL and EESL has become subsidiary of PFC.
During FY 2018-19 Government of India (Gol) transferred 1,93,72,120 and 16,19,54,570 Equity Shares held in the Company, through the New Fund Offer, to the Asset Management Company (AMC) of Bharat 22 ETF and CPSE ETF respectively. Consequently, the Government of India's shareholding came down from 65.92% to 59.05% respectively.
During FY 2018-19, Power Finance Corporation (PFC) acquired 103,93,99,343 Equity Shares of REC (representing 52.63% of the Share Capital of REC) and since then, became the Holding Company and also the Promoter of REC. Consequently, REC Transmission Projects Company Limited, REC Power Distribution Company Ltd, Koderma Transmission Limited, Mandar Transmission Limited, Dinchang Transmission Limited, Chandil Transmission Limited and Dumka Transmission Limited, the subsidiaries of REC as on March 31, 2020 became the subsidiaries of PFC.
As on March 31, 2022, the Government of India's shareholding was 55.99%.
As at March 31, 2023, outstanding loan balances of Solar & Wind energy projects funded by PFC are Rs 14,765 crore & Rs 13,442 crore respectively. The total capacity (MW) of outstanding Solar & Wind energy projects funded by PFC as on March 31, 2023 is 9,324 MW.
On 25th August, 2022, PFC was granted the mandate by the Ministry of Power to extend lending support to the infrastructure and logistics sector. PFC has sanctioned loan of Rs 633 Crore to Blu Smart for the purchase of 5000 passenger Electric Vehicles (EVs). Further, PFC's funding of Rs 6,112 Crore to refinance 1,227 MW Solar and Wind Projects of JSW Energy Group underscores its commitment to sustainable energy.
As on March 31, 2023, 49 SPVs have been established for ITPs by PFC / PFCCL. During year 2023, nine companies/ Independent Transmission Projects (ITPs)-SPVs were incorporated including, Siot Transmission Limited, Fatehgarh III Beawar Transmission Limited, Beawar Dausa Transmission Limited, Khandukhal Rampura Transmission Limited - Transferred, Fatehgarh III Transmission Limited, Bhadla III Transmission Limited, Fatehgarh IV Transmission Limited, Raipur Pool Dhamtari Transmission Limited - Transferred and Dharamjaigarh Transmission Limited -Transferred. Further during FY 2022-23, SPVs established for development of transmission projects transferred comprised of Khetri-Narela Transmission Limited, Khandukhal Rampura Transmission Limited, Kishtwar Transmission Limited, Bhadla-Sikar Transmission Limited, Raipur Pool Dhamtari Transmission Limited and Dharamjaigarh Transmission Limited.
As at March 31, 2023, the Company along with its subsidiary RECL holds 33.13% stake in equity share capital of EESL (17.65% directly and 15.68% through its subsidiary RECL). As on March 31, 2023, PFC holds 24,55,00,000 Equity Shares of FV of Rs 10 each of Energy Efficiency Services Limited valued at Rs 158.08 crore.
During 2023, PFC, through The United States Agency for International Development (USAID) launched South Asia Distribution Utilities Network (DUN), across Bhutan, Bangladesh, India, Maldives, Nepal and Sri Lanka for the reform and modernisation of the sector.
As on March 31, 2023, PFC's Gross Loan assets comprised of Rs 48,198 crore in Renewable energy comprising Rs 16,251 crore of large hydro projects (>25MW) and Rs 31,947 crore other than large hydro projects.
During FY 2022-23, PFC signed a Loan Agreement for JPY 30 billion with Japan bank for International cooperation (JBIC). Further, a Project Loan agreement (PLA) was signed for JPY 2.65 billion between PFC and JBIC. Thus, the funds under the facility would be used by PFC to finance its renewable energy portfolio.
Power Finance Corporation Ltd
Chairman Speech
Ladies and Gentlemen,
Welcome to the 37th Annual General Meeting of your company. Let me
begin by congratulating you for yet another year of stellar financial performance by your
Company.
OPERATIONAL & FINANCIAL PERFORMANCE
The year 2022-23 was the year of resurgence for PFC, as we
emerged from the adverse impact of COVID and achieved impressive growth
along with outstanding financial performance.
I am delighted to share that, in FY 2022-23 we have delivered the
highest ever net profit of J11,605 crore, up 16% from the previous
fiscal. This is the third consecutive year in which we are setting a
new record for the highest annual profit. We registered double-digit growth of 13% in our
loan asset book.
As a result, loan asset portfolio surpassed the J4 lakh crore mark and
stood at J4,22,498 crore as on March 31, 2023. We have also achieved an all-time high loan
sanctions of J2.32 lakh crore and
disbursed J85,756 crore during the year, underscoring our role as the
principal lender to the Indian power sector. On the asset quality front also, significant
strides have been
made in reducing Non-Performing Assets, resulting in the NPA ratios
dipping to their lowest levels in the past seven years. In the fiscal year 2023, the Net
NPA ratio stood at 1.07%. Coupled with strong growth, consistent profits and stable asset
quality, we continued to have a robust net worth of J68,202 crore. Continuing with our
commitment to maximise shareholders return,
we have declared a dividend of J13.25 per share, which equates to
impressive 132.5% on the share face value.
MACRO-ECONOMIC SCENARIO & POWER SECTOR OUTLOOK
The global macroeconomic scenario in FY 2022-23 has been challenging,
but India has been one of the few bright spots, with the economy continuing to grow at a
robust pace, supported by healthy domestic demand and prudent monetary policy.
This favourable economic environment is set to benefit the Power
Sector's growth. Untapped demand potential is significant, driven by India's vast
population of nearly 1.44 billion.
The Government's "Make in India" initiative and the
Production-Linked Incentive scheme are expected to further boost demand. Projections
indicate a 7.18% Compound Annual Growth Rate (CAGR) in India's electricity consumption
until 2027.
To address this growing demand, additional capacity would be needed.
Government plans to double the installed capacity, with addition of around 500 GW of
capacity by 2032, with 87% from
non-fossil fuel sources and 13% from fossil fuels, requiring an
estimated investment of approximately J31 lakh crore.
An integral aspect within the power sector value chain is the role of
distribution companies (Discoms).
Over recent years, Discoms
have grappled with financial and operational challenges, which has put
a strain on the entire power sector value chain. However, a
transformative shift is underway. The government has undertaken
significant reforms for Discoms
over the past two years. The impact of these reformative measures, as
part of the Revamped Distribution Sector Scheme (RDSS), is evident. All India level
AT&C losses are at 16.5% in FY 2021-22, which is significantly lower than FY 2020-21
figure of 21.5%. The ACS-ARR gap, which is the cash-adjusted revenue gap per unit of
electricity sold, significantly improved to 40 paise per unit in
FY 2021-22 compared to 89 paise per unit in FY 2020-21.
Equally noteworthy is our success in implementing the LPS Rules. Over
the past year, we have disbursed loans worth J16,800 crore to power distribution companies
under these rules.
I am delighted to share that, in FY 2022-23 we have
delivered the highest ever net profit of J11,605 crore, up 16% from the
previous fiscal. This is the third consecutive year in which w are setting a new record
for the highest annual profit.
The settlement of current dues are also being monitored rigorously with
the help of PRAAPTI portal, which is set up and maintained by our subsidiary, PFCCL. The
scheme has brought in the much needed fiscal discipline in the sector, which is helping
all the players across the power sector value chain.
The power sector is currently at an interesting juncture, which creates
plethora of growth opportunities for PFC.
Embracing the motto 'Nayi Soch Nayi Raahein,' PFC is boldly moving into
new directions, shaping the future through innovative ideas and forward-looking
perspectives.
Forayed into Infrastructure Financing
On 25th August, 2022, PFC was granted the mandate by the Ministry of
Power to extend lending support to the infrastructure and logistics sector. With the
amendment in
the Memorandum of Association, PFC's lending capabilities have
been extended to encompass the wider infrastructure and logistics sectors. This is one of
those milestone decision, which will play a crucial role in PFC's long term business
growth. The idea is to gradually build it over time and creating a complementing business
line as the power sector matures.
Under the new mandate, we have supported projects in the domains of
healthcare, sea water desalination, petrochemicals,
optic fibre networks, roads, ports,
and metro rail systems. In the last financial year, we have sanctioned
projects worth J16,700 crore to
non-power infrastructure segments. Being a new funding area for PFC,
our present focus is on building appraisal and monitoring capabilities. Majority of the
projects we have funded till now are from the Government sector.
Forging a Greener Future through integrating Environment, Social and
Governance (ESG) pillars
In today's world, climate change is one of the most critical challenges
we face. Among its drivers, the energy sector emerges as pivotal, with its transformation
deeply impacting society. Recognising this, the Indian government has unveiled the
'Panchamrit' agenda, aiming
for a non-fossil energy capacity of
500GW by 2030, a billion-ton carbon reduction, a 45% emission intensity
decrease by 2030, and net-zero emissions by 2070.
PFC is fully committed to the Government's vision for a Greener
India. Over the years, PFC has consciously adapted its business model to tap renewable
energy business by making structural changes to integrate climate risk into our appraisal
and loan policies, as well as incorporating climate change considerations into our pricing
strategies. This has led to PFC's renewable portfolio multiplying by over 6 times in last
6 years, currently standing at J48,200 crore. Today PFC is India's largest renewable
financier, supporting almost a fifth of the India's renewable energy capacity.
We are also focussing on reducing adverse environmental impact of
fossil fuel based projects,which is demonstrated by over J2,500 crore of loans sanctioned
for implementing Flue Gas
De-sulphurisation (FGD) systems.
Notably, PFC has sanctioned loan of J633 crore to Blu Smart for the
purchase of 5000 passenger Electric Vehicles (EVs). This move is expected to lead to
emission savings exceeding 100,000 tons
of CO2 equivalent. To put this into perspective, it's
equivalent to the CO2 absorption capacity of over
5 million fully-grown trees in a year. This transaction also marks the
largest E-vehicle asset finance
initiative in India, poised to greatly enhance the adoption of clean
energy alternatives. Further, PFC's funding of J6,112 crore to refinance 1,227 MW solar
and wind projects of JSW Energy Group underscores its commitment to sustainable energy. In
alignment with Government initiative for making
urban India "Garbage Free", PFC has cumulatively sanctioned
waste to energy projects worth J1,600 crore with a combined capacity of 192 MW. Notably,
more than 80% of the disbursement for these projects has already been made.
Our commitment to making a sustainable future is strong, and we are
taking big steps forward. In the current FY 2023-24, PFC is steadfastly working to
institute a well-structured approach to our ESG practices, seamlessly
integrating Environmental, Social, and Governance principles into our
operations. In this direction, PFC has already taken tangible actions to integrate ESG
into our business. Recently, to have a focussed approach towards ESG, a
dedicated Environment, Social, and Governance (ESG) unit has been
established. This centralised ESG unit will work in close collaboration with various
stakeholders to chart the ESG course for PFC.
These endeavours constitute a few immediate steps we have taken towards
ESG integration. Our promise is to keep lending responsibly and sustainably. But we are
not just making changes for ourselves—we are leading the way for the entire energy
sector.
PFC'S FUTURE BUSINESS THRUST AREAS
We will continue to increase
our financing in our traditional business areas of generation and
T&D space. This will be further
complemented with infrastructure financing. In addition to these areas,
our financing endeavours will also be closely aligned with the government's goals and
vision for the power sector particularly in clean energy space and RDSS.
Renewable & Emerging Technologies in Clean Energy Space
In order to achieve India's energy transition targets, the share
of renewable energy in the energy mix, which is presently about 27%, will have to reach
50% by 2030. This requires quadrupling of the present solar and wind generation capacity.
We would also have to add about 10 GW of pumped storage capacity and over 100 GWh of
battery storage in order to meet the energy balancing
needs. Commensurate equipment manufacturing capacity and evacuation
infrastructure also need to be in place.
Given the huge investment required for decarbonisation of our economy,
funding of energy transition related projects will be PFC's mainstay
for the foreseeable future. PFC is focused on funding entire value
chain of energy transition. In addition to the traditional solar/wind projects, we are
also
exploring bankable projects in the
fields of renewable equipment manufacturing, energy storage, green
evacuation corridors and electric mobility, green hydrogen
and ammonia production and manufacturing of electric vehicles.
Revamped Distribution Sector Scheme (RDSS)
Your company has been designated by the Government of India as the
nodal agency for the implementation Revamped
Distribution Sector Scheme (RDSS)
RDSS has an outlay of J3,03,758 crore covering Smart metering and
infrastructure works, with an estimated Government grant of J97,631 crore. The objective
of the
scheme is to reduce AT&C losses to pan-India levels of 12-15% by
2024-25 and reduction of ACS-ARR gap to zero by 2024-25.
The funding under the scheme will be from the Government grants, and
balance will be counterpart funding from PFC or our subsidiary REC or State's own
equity for infrastructure works.
Before the counter-part funding starts, the action plans submitted by
the State Discoms are to be approved and Government grant portion is to be released based
on achievements of milestones. The action plan approval process is complete for nearly all
Eligible States of PFC. Further, sanctioned work is being awarded by Discoms and the grant
release cycle has started
On Capex side, 80% of the tenders for loss reduction projects have been
floated and 40% of the works awarded.
Around J1,679 crore of grant has been released so far by PFC. With the
progress we have made, we expect counterpart disbursements under RDSS to commence towards
the end of FY 2023-24.
In conclusion, we remain optimistic about our future growth. By
leveraging favourable market conditions and maintaining our commitment to prudent lending
practices, we expect to continue growing at a similar pace as we have witnessed this year.
CORPORATE GOVERNANCE & SOCIAL RESPONSIBILITY
At PFC, we are committed to upholding the highest standards of
transparency, accountability, and disclosure. As a publicly listed company, we adhere to a
comprehensive framework of
corporate governance frameworks and policies such as the Companies Act,
2013, SEBI's Listing Obligations & Disclosure Requirements Regulations, DPE Guidelines
etc. We also have various risk management Committees at Board level & senior
management levels which oversees the key functions of our company and provide strategic
directions in each area.
This ensures that every aspect of our work is guided by principles that
promote integrity, fairness, and responsible conduct.
ACKNOWLEDGEMENT
Before I conclude, I want to express my heartfelt gratitude to our
shareholders who have reposed faith in us. I am grateful to the Hon'ble Union
Minister of Power, New and Renewable Energy, Hon'ble Minister of State for Power and
the officials of Ministry of Power for their support and guidance. I also thank the Board
of Directors for their valuable guidance, our client utilities, employees, various
ministries, investors, auditors, regulators and other stakeholders of PFC for their
continued support.
Let us move forward with renewed determination, knowing that our
efforts are contributing to a brighter, more sustainable future for India.
Together, we can continue to light up lives, power progress, and make a
lasting impact on our nation's growth story.
Thank you, and let us make Power Finance Corporation's journey ahead
even more remarkable.
Parminder Chopra
Chairman & Managing Director
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Power Finance Corporation Ltd
Company History
Power Finance Corporation Ltd is a leading power sector Public Financial Institution and a Non-Banking Financial Company providing fund and non-fund based support for development of the Indian power sector. The Company is engaged in power sector financing, the integrated development of the power and associated sectors. They provide large range of Financial Products and Services like Rupee Term Loans, Transitional Financing Services, Project Term Loan, Equipment Lease Financing, Direct Discounting of Bills, Short Term Loan, and Consultancy Services etc for various Power projects in Generation, Transmission, and Distribution sector as well as for Renovation & Modernization of existing power projects.
The Company's clients include state power utilities, central power sector utilities, 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 all aspects of the generation, transmission and distribution and related activities in the power sector in India.
Power Finance Corporation Ltd was incorporated on July 16, 1986 as a public limited company. The GoI established the company as a financial institution in order to finance, facilitate and promote power sector development in India with the President of India holding 100% of the equity share capital. In December 31, 1987, they commenced their business operations. In the year 1988, they started lending activities. In the year 1990, the company was declared as a public financial institution.
In the year 1991, the company was conferred with a license to deal in foreign exchange in the power sector. In the year 1992, Project on Energy Management Consultation and Training (EMCAT) became operational with the objective to bring about improvement in the efficiency of the energy supply component of the power sector with the help of USAID. In the year 1996, the company started funding private power projects.
In the year 1998, the company was granted the Mini Ratna (Category I) status. They promoted a joint venture company, namely PTC Ltd in association with NTPC and PGCIL. In the year 1999, the company launched consultancy services in order to provide consultancy services to both state owned and private power utilities for the power and financial sectors.
In the year 2003, the company was appointed as a nodal agency by the MoP to fund the India Power Fund scheme to catalyze the process of fresh equity investment in the power sector. In the year 2005, the company entered into MoU with LIC and ten leading public sector banks for consortium financing of power projects. In the year 2006, the company incorporated seven subsidiary companies for developing UMPPs. They issued the letter of intent for the Sasan and Mundra UMPPs. In the year 2007, they incorporated their eighth subsidiary company for developing UMPP.
During the year 2006-07, the company launched their IPO and the holding of Government of India reduced from 100% to 89.78% of the paid-up equity. On successful completion of bidding process, two of the subsidiaries, Coastal Gujarat Power Ltd and Sasan Power Ltd were transferred to Tata Power Company Ltd and Reliance Power Ltd on April 22, 2007 and August 7, 2007 respectively. The company was registered as a Non Banking Financial Company by RBI and was conferred with the status of Nav Ratna by the Govt of India on June 22, 2007.
During the year 2007-08, the projects, namely Maneri Bhali U-1,3&4 (228 MW) of UTJVNL in Uttaranchal, Balimela U-7 of OHPC in Orissa and Teesta V HEP U-2 (170 MW) of NHPC in Sikkim, which were supported by the company were commissioned. The company sanctioned loans worth Rs 190 crore for R & M and Life Extension of thermal power plants. Also, they sanctioned Rs 222 crore for R&U of Hydro Power Projects.
In March 2008, the company signed an MoU with RITES Ltd (A Govt. of India Enterprise) to facilitate import of coal from African countries and elsewhere. Also, they signed an MoU with TNEB whereby PFC would finance cogeneration projects of around 250 MW planned to be set up at a cost of Rs1200 crore in various cooperative and public sector sugar mills in the state of Tamil Nadu.
In March 25, 2008, the company launched a 100% owned subsidiary company, namely PFC Consulting Ltd for providing consulting services. Also, they incorporated an advisory company namely Power Equity Capital Advisors Private Limited to provide advisory services related to equity investments in Indian power sector.
During the year 2008-09, the company established a Consortium Lending Group (CLG) with an aim to give fillip to Consortium Lending Operations, particularly through the Power Lenders' Club (PLC) which has 21 members including LIC, HUDCO and 18 Indian banks. The projects in association with the company, namely Baglihar HEP (3x150 MW) of JKPDCL in Jammu and Kashmir, Priyadarshni Jurala HEP (6x39 MW) of APPGCL in Andhra Pradesh and Varahi HEP (2x115 MW) of KPCL in Karnataka were commissioned.
During the year, the company sanctioned loans worth Rs 214 crore for R&M and life extension of thermal power plants. Also, they sanctioned Rs 48 crore for R&M of hydro power projects. Chhattisgarh State Electricity Board was reorganized / unbundled into Chhattisgarh State Power Holding Company Ltd., Chhattisgarh State Power Generation Company Ltd., Chhattisgarh State Power Transmission Company Ltd., Chhattisgarh State Power Distribution Company Ltd. and Chhattisgarh State Power Trading Company Ltd with effect from January 1, 2009. Also, the company in association with NTPC, NHPC and TCS promoted National Power Exchange Ltd with an authorized capital of Rs.50 crore.
The company was conferred with the coveted 'KPMG-Infrastructure Today Award 2008' for 'Most Admired Government Enabler - Power' category.
During the year 2009-10, the company sanctioned loans worth Rs 1,950 crore for R&M and life extension of thermal power plants. Also, they sanctioned Rs 74 crore for R&M of hydro power projects. In August 2009, Jharkhand Integrated Power Ltd. for Tilaiya UMPP in Jharkhand has also been transferred on 7th August, 2009 to Reliance Power Ltd. In November 2009, the company signed a joint venture agreement with TPC Ltd., Power Grid Corporation of India Ltd. and Rural Electrification Corporation Ltd for incorporating a Joint Venture Company with equal equity contribution (i.e. 25% each) from all the 4 CPSUs.
As on March 31, 2010, the company established twelve Special Purpose Vehicles for UMPPs to undertake preliminary site investigation activities necessary for conducting the bidding process for these projects. Ministry of Power is the 'facilitator' for the development of these UMPPs while Central Electricity Authority (CEA) is the 'Technical Partner'. These SPVs shall be transferred to successful bidder(s) selected through Tariff Based International Competitive Bidding Process for implementation and operation.
During the year 2010-11, loans worth Rs 556 crore were sanctioned for R&M and life extension of thermal power plants and an amount of Rs 562 crore was disbursed. Also, they disbursed Rs 83 crore for R&M of hydro power projects. In July 28, 2010, RBI classified the company as an Infrastructure Finance Company (IFC).
In October 2010, the company signed an MoU with NPCIL, the only player in nuclear power generation in India, for offering financial assistance to NPCIL for their new power projects as well as renovation, refurbishment and life extension projects etc.
During the first quarter of financial year 2011-12, the company made a Further Public Offer (FPO) of 22,95,53,340 equity shares of Rs 10 each. The issue included a fresh issue of 17,21,65,005 equity shares by the Company and an offer for sale of 5,73,88,335 equity shares by the President of India acting through Ministry of Power, Government of India.
In March 30, 2011, the company incorporated a wholly-owned subsidiary company namely Power Finance Corporation Green Energy Ltd to provide financial support for generating green (Renewable and Non-conventional sources of) energy. In July 18, 2011, they incorporated a wholly owned subsidiary, PFC Capital Advisory Services Ltd to syndicate and make financial arrangements for the Projects/ enterprises in the areas of power, energy, infrastructure and other industries.
During 2012, the corporation incorporated a Special Purpose Vehicle (SPV), as a wholly-owned subsidiary Company namely Deoghar Mega Power Limited. The Corporation also disbursed Rs 7,400 cr loan to 5 sick Discoms
In 2013, four Special Purpose Vehicles (SPVs) as wholly owned subsidiaries was incorporated by PFC Consulting Limited, a wholly owned subsidiary of the Corporation Limited. PFC Green Energy, a Wholly owned Subsidiary commenced operations in the month of March.
In 2014, the corporation incorporated Two (2) wholly Owned Subsidiaries of Power Finance Corporation Ltd, Cheyyur Infra Ltd and Odisha Infrapower Ltd. The Corporation decided to extend a Rs 15,000-crore loan to the Andhra Pradesh government to improve power sector infrastructure facilities and was officially announced. During the year, The Securities and Exchange Board of India granted a certificate of registration as a Debenture Trustee to PFC Capital Advisory Services Limited, a wholly owned subsidiary of Power Finance Corporation Limited (PFC).
In 2015, the corporation achieves MOU Targets of Financial Year 2014-15 for Sanctions and Disbursements. During the year, the Corporation incorporated Bihar Mega Power Limited as its wholly-owned subsidiary and also incorporated Jharkhand Infrapower Ltd as a wholly owned subsidiary of the corporation.
On 27 July 2015, Government of India offloaded 6.6 crore equity shares, representing a 5% stake in Power Finance Corporation via Offer for Sale through the stock exchanges mechanism. After the stake-sale, Government of India's holding in PFC declined to 67.8% from 72.8%.
On 21 April 2016, Power Finance Corporation informed the stock exchanges that Odisha Generation Phase-II Transmission Limited, a wholly owned subsidiary of PFC Consulting Limited (wholly owned subsidiary of Power Finance Corporation Limited) established for development of common transmission system for phase-II generation projects in Odisha, has been transferred to M/s Sterlite Grid 3 Limited (the successful bidder).
On 2 June 2016, Power Finance Corporation Ltd (PFC) announced that it has acquired 23.32% stake in Shree Maheshwar Hydel Power Corporation Limited (SMHPCL) upon invocation of shares pledged by SMHPCL's promoters and upon partial conversion of sub debt loan to SMHPCL. PFC decided to invoke the pledged shares following loan default from SMHPCL. PFC was one of the lenders to SMHPCL and had given loan of Rs 700 crore to SMHPCL along with guaranteeing Rs 400 crore to the bond holders of SMHPCL.
On 6 July 2016, Power Finance Corporation Ltd informed the stock exchanges that Warora-Kurnool Transmission Limited, a wholly owned subsidiary of PFC Consulting Limited (wholly owned subsidiary of Power Finance Corporation), established for development of Transmission System for 'Additional inter-Regional AC link for import into Southern Region i.e. Warora - Warangal and Chilakaluripeta - Hyderabad - KurnooI 765 kV link' Common Transmission System has since been transferred to M/s Essel Infraprojects Limited (the successful bidder) on 6 July 2016.
The Board of Directors of Power Finance Corporation Ltd at its meeting held on 14 July 2016 recommended issue of bonus shares in the ratio of 1:1.
On 15 July 2016, Power Finance Corporation Ltd informed the stock exchanges that Gurgaon-Palwal Transmission Limited (a wholly owned subsidiary of PFC Consulting Limited) established for development of Transmission System for 'Creation of new 400 kV substations in Gurgaon area and Palwal area as a part of ISTS' has since been transferred to M/s Sterlite Grid 4 Limited (the successful bidder) on 14 July 2016.
On 7 December 2017, Power Finance Corporation (PFC) announced that it has successfully closed the deal for issuance of USD 400 million Green Senior Unsecured Notes offering at a fixed rate coupon of 3.75% from the international debt capital markets under Regulation S of the U.S. Securities Act of 1933 (as amended) on 6 December 2017 and completed the formalities for listing at Singapore Exchange (SGX-ST) and International Securities Market segment of the London Stock Exchange.
Pursuant to the order of Ministry of Corporate Affairs dated February 5, 2019, PFC Capital Advisory Services Limited (PFCCAS, a wholly owned subsidiary of the Company) was amalgamated with PFC Consulting Limited, wholly owned subsidiary of the Company w.e.f. the appointed date i.e. April 1, 2018. Further, pursuant to the order of Ministry of Corporate Affairs dated February 7, 2019, PFC Green Energy Limited (PFCGEL, a wholly owned subsidiary of the Company) got amalgamated with the Company from the appointed date i.e. April 1, 2017.
During the year 2018-19, the Company acquired 52.63% shareholding held by the President of India in REC Limited (REC) at Rs 139.5036 per share for a total cash consideration of Rs. 1,44,99,99,50,186/- on March 28, 2019. By virtue of this investment, the Company became the holding company of REC and REC became subsidiary of PFC. Further, since PFC acquired REC on March 28, 2019, the holding of REC in Energy Efficiency Services Limited (EESL) i.e. 21.70% which when combined with PFC's share in EESLi.e. 36.36% amounts to 58.06%. Accordingly, company has since become the holding company of EESL and EESL has become subsidiary of PFC.
During FY 2018-19 Government of India (Gol) transferred 1,93,72,120 and 16,19,54,570 Equity Shares held in the Company, through the New Fund Offer, to the Asset Management Company (AMC) of Bharat 22 ETF and CPSE ETF respectively. Consequently, the Government of India's shareholding came down from 65.92% to 59.05% respectively.
During FY 2018-19, Power Finance Corporation (PFC) acquired 103,93,99,343 Equity Shares of REC (representing 52.63% of the Share Capital of REC) and since then, became the Holding Company and also the Promoter of REC. Consequently, REC Transmission Projects Company Limited, REC Power Distribution Company Ltd, Koderma Transmission Limited, Mandar Transmission Limited, Dinchang Transmission Limited, Chandil Transmission Limited and Dumka Transmission Limited, the subsidiaries of REC as on March 31, 2020 became the subsidiaries of PFC.
As on March 31, 2022, the Government of India's shareholding was 55.99%.
As at March 31, 2023, outstanding loan balances of Solar & Wind energy projects funded by PFC are Rs 14,765 crore & Rs 13,442 crore respectively. The total capacity (MW) of outstanding Solar & Wind energy projects funded by PFC as on March 31, 2023 is 9,324 MW.
On 25th August, 2022, PFC was granted the mandate by the Ministry of Power to extend lending support to the infrastructure and logistics sector. PFC has sanctioned loan of Rs 633 Crore to Blu Smart for the purchase of 5000 passenger Electric Vehicles (EVs). Further, PFC's funding of Rs 6,112 Crore to refinance 1,227 MW Solar and Wind Projects of JSW Energy Group underscores its commitment to sustainable energy.
As on March 31, 2023, 49 SPVs have been established for ITPs by PFC / PFCCL. During year 2023, nine companies/ Independent Transmission Projects (ITPs)-SPVs were incorporated including, Siot Transmission Limited, Fatehgarh III Beawar Transmission Limited, Beawar Dausa Transmission Limited, Khandukhal Rampura Transmission Limited - Transferred, Fatehgarh III Transmission Limited, Bhadla III Transmission Limited, Fatehgarh IV Transmission Limited, Raipur Pool Dhamtari Transmission Limited - Transferred and Dharamjaigarh Transmission Limited -Transferred. Further during FY 2022-23, SPVs established for development of transmission projects transferred comprised of Khetri-Narela Transmission Limited, Khandukhal Rampura Transmission Limited, Kishtwar Transmission Limited, Bhadla-Sikar Transmission Limited, Raipur Pool Dhamtari Transmission Limited and Dharamjaigarh Transmission Limited.
As at March 31, 2023, the Company along with its subsidiary RECL holds 33.13% stake in equity share capital of EESL (17.65% directly and 15.68% through its subsidiary RECL). As on March 31, 2023, PFC holds 24,55,00,000 Equity Shares of FV of Rs 10 each of Energy Efficiency Services Limited valued at Rs 158.08 crore.
During 2023, PFC, through The United States Agency for International Development (USAID) launched South Asia Distribution Utilities Network (DUN), across Bhutan, Bangladesh, India, Maldives, Nepal and Sri Lanka for the reform and modernisation of the sector.
As on March 31, 2023, PFC's Gross Loan assets comprised of Rs 48,198 crore in Renewable energy comprising Rs 16,251 crore of large hydro projects (>25MW) and Rs 31,947 crore other than large hydro projects.
During FY 2022-23, PFC signed a Loan Agreement for JPY 30 billion with Japan bank for International cooperation (JBIC). Further, a Project Loan agreement (PLA) was signed for JPY 2.65 billion between PFC and JBIC. Thus, the funds under the facility would be used by PFC to finance its renewable energy portfolio.
Power Finance Corporation Ltd
Directors Reports
Power Finance Corporation Ltd
Company Background
| Incorporation Year | 1986 |
| Registered Office | Urjanidhi No 1 Barakhamba Lane,Connaught Place
New Delhi,New Delhi-110001 |
| Telephone | 91-11-23456000,Managing Director |
| Fax | 91-11-23412545 |
Parminder ChopraParminder Chopra| Company Secretary | Manish Kumar Agarwal |
| Auditor | Dass Gupta & Associates/Prem Gupta & Co |
| Face Value | 10 |
| Market Lot | 1 |
| Listing | BSE,NSE, |
| Registrar | KFin Techologies Ltd
Karvy Selenium Tow-B,31&32 Financial Dist,Nanakramguda ,Hyderabad-500032 |
Power Finance Corporation Ltd
Company Management
| Director Name | Director Designation | Year |
|---|
| Parminder Chopra | Chairman & Managing Director | 2023 |
| Rajiv Ranjan Jha | Director (Projects) | 2023 |
| MANOJ SHARMA | Director (Commercial) | 2023 |
| Ajay Tewari | Nominee (Govt) | 2023 |
| Bhaskar Bhattacharya | Independent Director | 2023 |
| Usha Sajeev Nair | Independent Director | 2023 |
| Prasanna Tantri | Independent Director | 2023 |
| Manish Kumar Agarwal | Company Sec. & Compli. Officer | 2023 |
Power Finance Corporation Ltd
Listing Information
| Listing Information |
|---|
| BSE_500 |
| BSE_100 |
| BSE_200 |
| BSEDOLLEX |
| BSE_PSU |
| NIFTYJR |
| CNX500 |
| BSEMID |
| CNX100 |
| CNX_PSE |
| CNX200 |
| CNXFINANCE |
| CNXDIVIDEN |
| CNXALPHAIN |
| BSECARBONE |
| BSEINFRA |
| BSECPSE |
| NFT100EQWT |
| BSEALLCAP |
| BSEFINANCE |
| BSEMIDSELE |
| SENSNEXT50 |
| BSEBHARA22 |
| MID150 |
| LMI250 |
| MSL400 |
| BSEEVI |
| BSEMOI |
| NFTYLM250 |
| NFTM150Q50 |
| NFTYFS2550 |
| NFTY200M30 |
| NF500M5025 |
| NFTYTOTMKT |
| NFTY200A30 |
| NFMC150M50 |
Power Finance Corporation Ltd
Finished Product
| Product Name | Unit | Installed
Capacity | Production
Quantity | Sales
Quantity | Sales
Value |
|---|
| Interest | Rs. | 0 | 0 | 0 | 36701.22 |
| Dividend | Rs. | 0 | 0 | 0 | 1347.42 |
| Fees & Commission Income | Rs. | 0 | 0 | 0 | 496.76 |
| Commitment Charges on Loan | Rs. | 0 | 0 | 0 | 0 |
| Income from Surplus Funds | Rs. | 0 | 0 | 0 | 0 |
| Other Operating Revenue | NA | 0 | 0 | 0 | 0 |
| prepayment premium | Rs. | 0 | 0 | 0 | 0 |
| Service Charges | Rs. | 0 | 0 | 0 | 0 |
| Lease Income | Rs. | 0 | 0 | 0 | 0 |
| Income from Consult.Services | Rs. | 0 | 0 | 0 | 0 |
| Profit on Sale of Investments | Rs. | 0 | 0 | 0 | 0 |