Power Finance Corporation Secures Record USD 1.265 Billion Loan

PFC (Power Finance Corporation), a Maharatna company and leading NBFC in the Indian power and infrastructure sector, announced the successful closing of issuance of the largest-ever foreign currency term loan from an Indian PSU amounting to USD 1.265 billion. This landmark transaction was executed through a facility agreement with multiple banks based in IFSC GIFT City, Gandhinagar.

Objective of the Loan

• The loan will primarily finance assets other than thermal generation projects, aligning with PFC’s commitment to promoting renewable energy.
• It aims to support PFC in expanding its operations, enhancing market presence, diversifying funding sources, and maintaining a competitive edge in the industry.

Loan Details

• The loan features a floating interest rate, currently at an average rate of 4.21% per annum.
• It is denominated in G3 currencies: USD, EUR, and JPY.
• The loan has a 5-year tenor and is linked to external benchmark rates, including:
• SOFR (Secured Overnight Financing Rate) for USD.
• EURIBOR (Euro Interbank Offered Rate) for EUR.
• TONA (Tokyo Overnight Average) for JPY.

Banking Partners

• The major bankers involved in this issuance include SBI, IDBI, Axis Bank, MUFG, Deutsche Bank, and SMBC.
• SBI served as the largest lender and acted as the facility agent for this landmark transaction.

About PFC

• Power Finance Corporation Ltd. (PFC) is an Indian central public sector undertaking owned by the Ministry of Power, Government of India.
• Established in 1986, it is the financial backbone of the Indian power sector.
• PFC has been providing financial assistance to power projects across India including generation, transmission, distribution and RM&U (Renovation, Modernization, and Uprating) projects.
• Recently, it began financing other infrastructure projects which have backward linkages to the power sector like coal mine development, fuel transportation, oil & gas pipelines, etc.

Summary/Static	Details
Why in the news?	PFC (Power Finance Corporation), a Maharatna company and leading NBFC in the Indian power and infrastructure sector, announced a term loan from an Indian PSU amounting to USD 1.265 billion.
Company	Power Finance Corporation (PFC), Maharatna company, Indian PSU under the Ministry of Power.
Loan Amount	USD 1.265 billion – largest-ever foreign currency term loan by an Indian PSU.
Objective	To finance assets outside of thermal generation projects, focusing on renewable energy.
Purpose of Loan	Expand PFC’s operations, diversify funding, enhance market presence, and maintain competitiveness.
Loan Details	Floating interest rate at 4.21% per annum (average)
Currency Denomination	G3 currencies: USD, EUR, and JPY.
About PFC	Estd. in 1986