Renewable, T&D assets dominate PFC & REC loan books as thermal loses steam

Stress in conventional power generation space and no new private investment in the sector see the two lenders gradually shift to newer areas

Two leading power sector financiers in the country — Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) — are witnessing a marked shift in their lending portfolio. This is owing to stress in the thermal power generation segment, along with lack of any new private investment in this space. 

Renewable energy and transmission & distribution (T&D) segments have witnessed record growth in lending from these two institutions. 

PFC’s lending to the T&D segment has grown by 387 per cent in the past five years, while for REC, the increase is by 43.12 per cent. In comparison, growth in loan assets in