PFC looks beyond power; eyes farm, rail & smart cities

As its core business sector faces insolvency heat and with no new big projects in sight, Power Finance Corporation (PFC) is looking beyond the electricity sector.

The government-owned financier is looking to diversify its loan portfolio to fund irrigation schemes, railway electrification, the Smart Cities project and e-vehicle manufacturing & charging infrastructure.

Around 80,000 mw of power generation assets, including 14,000 mw of PFC’s loan book, are under Insolvency & Bankruptcy Code proceedings. And, likely to land at the National Company Law Tribunal if no debt resolution is achieved.

Last year, PFC ventured into renewable energy with separate lending schemes. Loans to this sector grew to 260 per cent.

In a first, the company sanctioned ~120 billion for the electro & hydro mechanical components of irrigation schemes in Telangana during 2017-18. It has till now disbursed ~20 billion for the same. It is now betting on growth in newer areas such as energy efficiency, gas or liquefied natural gas and coal mining, solar energy, distributed power generation through micro grids and electrification drive of the railways.

The net profit has ~9.35 billion for the quarter ending March. In the same period of FY17, it had loss of ~34.1 billion as non-profitable assets in its loan book grew 300 per cent. The company has since been revamping its business verticals and adding sectors to its portfolio. Last year, it started financing private power transmission projects and also distribution schemes.

It has reported record loan disbursement of ~644 billion in FY18 and sanctions of ~1,160 billion. “There was decrease in non-performing assets by 20 per cent to ~50.6 billion in the December quarter and there has been no new nonperforming assets addition in Q4,” said the company in an investor presentation.