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Power Finance Corporation cuts interest rates

Heeding the long standing demand of power promoters for cheaper funds, India’s federal Power Finance Corporation (PFC) has reduced its interest rates for financing power projects by up to 2%. This was helped by the fact that PFC has been able to raise funds at cheaper rates to meet its commitments, the benefits of which it now seeks to pass to its borrowers.

For hydro power projects (including small hydro), renewables and transmission schemes above 132kV, the new basic rate is 15% annually for government utilities and 16% for IPPs. For uprating and refurbishment the rates are 14.5% and 15%, respectively. PFC will charge an annual fee of 1.2% for giving financial guarantees to government-owned utilities, and 1.6% for IPPs.