Power Finance Corporation Current Affairs
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Cabinet Committee on Economic Affairs (CCEA) has given its in principle approval for strategic sale of Central Government’s existing 52.63% of total paid up equity shareholding in Rural Electrification Corporation (REC) to Power Finance Corporation (PFC) along with transfer of management control. Both REC and PFC are Central Public Sector Enterprises under the Ministry of Power.
The acquisition intends to achieve integration across Power Chain, create economies of scale, obtain better synergies and have enhanced capability to support energy access and energy efficiency by improved capability to finance power sector. It may also allow for cheaper fund raising with increase in bargaining power for combined entity.
Rural Electrification Corporation (REC)
It is public Infrastructure finance company in India’s power sector. It finances and promotes rural electrification projects across India. It provides loans to Central/ State Sector Power Utilities, State Electricity Boards, Rural Electric Cooperatives, NGOs and Private Power Developers. It was founded in July 1969 and is headquartered in New Delhi.
Ministry of Power has launched Pilot Scheme for Procurement of Aggregate Power of 2500 MW on competitive basis for 3 years. The main purpose of scheme is to revive commissioned power plants which are unable to sell electricity in absence of valid power purchase agreements (PPAs).
Under this scheme, these plants will be allowed to bid for power supply. Under it, power will be procured from generators with commissioned projects under medium term but without Power Purchase Agreement.
PFC Consulting Limited (a wholly owned subsidiary of state-run Power Finance Corporation) has been appointed as Nodal Agency and PTC India Limited as aggregator.
PTC India will sign three-year (mid-term) Agreement for power procurement with successful bidders and Power Supply Agreement with Discoms. Under pilot scheme, a single entity can be allotted maximum capacity of 600 MW.
The scheme will assure minimum off-take of 55% contracted capacity. The Tariff will be fixed for 3 years without any escalation. This scheme is expected to revive power demand which has affected generators not having Power Purchase Agreements.
The scheme will help nearly 12 GW commissioned thermal power plants get medium-term power purchase agreement (PPA) which is pre-requisite for getting coal linkage. Presently out of 40 GW stressed coal based power generation capacity, 28 plants of 24 GW worth Rs 1.44 lakh crore are commissioned. Nearly half of these capacities (12 GW) do not have coal linkage because of no PPAs.