Says well positioned to support asset creation in the renewable sector
NEW DELHI: Power Finance Corporation, India’s leading NBFC catering to the fund requirements of the power sector, is well-positioned and fully geared to wholeheartedly support the creation of more assets for the production of renewable power, its Chairman and Managing Director Ravinder Singh Dhillon has said. Addressing the company’s shareholders ahead of PFC’s 34th Annual General Meeting on Sep 29, 2020, the CMD said that tariffs have stabilized in the renewable energy segment and this provides huge opportunities to invest in clean sources of power.
“The renewable segment has also seen its share of positive news where the tariffs have stabilized and this provides huge opportunities to invest in clean sources of energy. This also gives strong tailwinds to India’s ambitious green energy target,” he said.
“Government is also focusing on indigenous production in various sectors and it is critical that the share of power sector equipment manufactured in India should increase going forward. We believe that various government initiatives like ‘Make In India’ & ‘Digital India’ will go a long way towards building an ecosystem for manufacturing wafers, ingots, cells, and modules within the country. This will not only help the Indian Power Sector being self-reliant and self-sustainable but will also help in generating employment and providing entrepreneurial opportunities. Being a leading lender in the country, your company is well-positioned to wholeheartedly support the creation of more assets for the production of renewable power,” he said in his letter to shareholders.
India is targeting 450 GW of renewable energy by 2030.
Talking about Prime Minister Narendra Modi’s clarion calls for ‘Vocal for Local’ and ‘Aatmanirbhar Bharat’, Dhillon said that both Indian corporates and the power sector can utilize this push from the government in promoting more domestic manufacturing, which will help in rebooting India’s economy faster. The PFC CMD also informed shareholders that the company’s loan disbursements in the last financial year that ended March 31, 2020, almost touched Rs 68,000 crore. Further, due to the various efforts made by PFC on the borrowing front, the cost of funds has reduced significantly from 7.95% in FY19 to 7.79% in FY20.
“On the borrowing front, your Company’s efforts towards diversification of borrowing portfolio has started yielding results. In the last financial year, PFC raised about USD 3 billion from international markets. Now, the share of foreign currency borrowings in the overall borrowing has increased to 16%. Going forward, we expect the foreign currency borrowings to contribute to our portfolio to a greater extent,” he said.
During the last financial year, 2019-20 (April-March), PFC raised Rs 47,701 crore rupees through foreign currency loans, up 65.5% from Rs 28,827 crore rupees in FY19.
In his communication to shareholders, the CMD also noted that various reform initiatives in the power sector will make it more efficient, resolve the stress, and attract investments into the sector. Proposed amendments in the National Tariff Policy such as capping of losses at 15% for determination of tariff, higher penalties for non-compliance to RPOs, restrictions on creation of new regulatory assets etc. are expected to give a boost to the power sector in the coming years.
The PFC CMD further informed his shareholders that as part of the company’s continued efforts towards the funding of projects to uplift the economically and socially backward citizens, the company disbursed Rs 97 crore under the CSR activities in FY20.
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