RK Singh urges REC, PFC to find cheap funds, increase funding to RE sector

New Delhi: At a review meeting, Union Minister for Power RK Singh urged REC Limited and PFC Limited to increase funding to the renewable energy sector and explore options for cheaper funds. The meeting took place on October 4 and October 5 in the presence of Minister of State for Power Krishan Pal, Ministry of Power's Secretary Alok Kumar and senior officers of the Ministry of Power, with CMDs of REC and PFC and senior officers of these CPSEs. The minister said that the government's vision is to make available affordable power for all 24×7. In this context, he stressed the need for improving the competitiveness of both institutions with a view to increasing 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.

Singh 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. 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.

The minister emphasised the need for the speedy resolution of stressed assets and suggested a slew of measures to both the organisations in this context, which includes ensuring that the stressed assets are resolved at a fair value with a minimal haircut for PFC & REC and in line with the national interests. He emphasized both PFC and REC to increase their outreach by establishing a physical presence across the country.

Apart from this, Minister also directed that the system of oversight on the projects funded by PFC and REC should be tightened, which includes increasing the frequency of inspections by the company officials as well as by hiring expert professionals from the market. He also laid emphasis on strengthening the risk management framework of both institutions.

Further, Singh also expressed his concern about the finances of some distribution companies and suggested remedial measures to PFC and REC, including establishing the presence of their lender nominees on the board of directors of DISCOMs of concern.

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