PFC to hike rate soon, open to fund coal blocks abroad

Power Finance Corporation (PFC) today said it will shortly hike its lending rate between 25 basis points (bps) and 50 bps.

"We'll have to adjust our rates according to current market scene. It will be within May and the hike could be between 25 bps and 50 bps," PFC Executive Director (Finance) Nalini Shastri Vanjani told PTI on the sidelines of PFC roadshow for its FPO issue.

The current lending rate of PFC varies between 11.5% and 13%.

The power sector lender was also open to finance overseas coal block acquisitions, she said.

"We have small group which looks into financing linkages and one such funding is approved in India. We have not yet taken a final call on overaseas funding for such linkages, including coal blocks," PFC Director (Projects) Rajeev Sharma said.

He said the Corporation had so far received feelers from private power companies through a private bank but no concrete proposal had come till now.

PFC's 90.7% of loans made to power generation, transmission, distribution, renovation and modernisation projects.

Vanjani said the existing loan portfolio of Rs 3,300 crore in renewable energy would be transferred to a new subsidiary Power Finance Corporation Green Energy that would focus only in renewable energy projects.

Meanwhile, PFC FPO issue opened on May 10 and will close on May 13 through 100% book-building route with the price band of Rs 193-203 per share. Post issue the capital adequacy will jump to 19.4% against 15.94% now.