The state-owned non-banking financial companies (NBFCs) Power Finance Corporation (PFC) and REC should to explore cheaper options for raising funds, including offshore sources.
Stating this, Power Minister R K Singh said, both the NBFCs should to focus on ensuring that the power sector value chain gets access to cheaper funds, particularly renewable energy.
“R K Singh, Union Minister of Power and New & Renewable Energy, reviewed the performance of REC and PFC on October 4 and 5, 2021, respectively, in the presence of Minister of State for Power Krishan Pal, power secretary, and senior officers of the Ministry of Power, with CMDs (chairman and managing directors) of REC and PFC,” the power ministry said in a statement.
The minister highlighted the government’s vision to make available affordable power for all round-the-clock, according to the statement.
In this context, he stressed the need for improving the competitiveness of both institutions to increase their market share.
He also advised that both the organisations should be nimble-footed and dynamically adapt to the changing market needs, increasing renewables, and make efforts to reduce their cost of funds.
On this context, he advised PFC and REC to explore better and cheaper options for raising funds, including from offshore sources, with an overall objective of ensuring that the power sector value chain gets access to cheaper funds, it stated.
For this, he directed PFC and REC to carry out a strategic analysis to adapt to the changing business environment in the sector with an overall objective to deliver power to consumers at a reasonable cost, it said.
The minister also stressed the need for a speedy resolution of stressed assets. He also suggested a slew of measures to both the entities in this context, including ensuring that the stressed assets are resolved at a fair value with a minimal haircut for PFC and REC and in line with the national interests.
He asked both PFC and REC to increase their outreach by establishing a physical presence across the country.
The minister also directed that oversight on the projects funded by PFC and REC should be tightened, the ministry said.
He also emphasised strengthening the risk management framework of both institutions. Further, Singh also expressed his concern about the finances of some power distribution companies.
He also suggested remedial measures to PFC and REC, including establishing the presence of their lender nominees in the board of directors of the discoms concerned, it stated.