Govt's drive to meet disinvestment target could push PFC, REC into trouble

If the Centre raises its stake in the merged company to 51 per cent, it will need to infuse roughly Rs 7,000 crore for the same

The Centre’s drive to meet its disinvestment target could land two of the leading power sector financers in trouble, sector executives fear. While for Rural Electrification Corporation (REC), it would mean losing concessional line of credit that it uses for financing flagship energy schemes, the disinvestment could strain the Power Finance Corporation’s (PFC’s) finances. 

Besides, there are apprehensions of money rotation — the Centre putting back part of the funds it earned from this deal into the merged entity since the proposed merger would lead to its holding in the new company coming down to around 45 per cent, thereby