Power Finance Corporation Ltd (PFC), through its recently carved out renewable energy funding initiative - PFC GEL, will fund wind energy, biomass and solar power projects, while providing consultancy services and aiding them secure carbon credits.

“PFC Green Energy Ltd (GEL) will begin lending to small and medium-size companies before the end of this quarter. All approvals have been secured, the venture created,” Mr R. Nagarajan, Director, Finance PFC, said.

“PFC has been funding non-conventional energy projects over the years. However, we felt that a separate subsidiary/venture would provide greater focus to this rapidly growing opportunity in the renewable energy. Significantly, we will also have access to some specialised funds focussing on lending green energy projects,” Mr D. Ravi, Executive Director (Entity Appraisal), PFC, said here today.

“PFC has traditionally funded large projects. Lately, we have begun funding projects in the wind energy, biomass and solar projects in all aggregating to about 100 MW. But we now plan to play a bigger role in supporting small companies not just with funding, but providing consulting services and also helping them secure carbon credits and trade them,” Mr Ravi explained.

“The solar power generation sector is abuzz after the announcement of the Jawaharlal Nehru National Solar Mission. Companies setting up solar projects have approached us for funding. We believe solar projects are financially viable. From about Rs 18 crore per MW, it has come down in the recent time to about Rs 15 crore and go down much further,” Mr Ravi said.

The solar power projects of 1-5 MW have generated interest lately and they require funding. This new venture seeks to address their requirements as lender and also as a consultant.

Ultra mega projects

Mr Ravi said of the four Ultra Mega Power Projects (UMPPs) awarded thus far, at least two of them –Sasan and Krishnapatnam – have been funded Rs 2,000 crore each by PFC. “We expect that UMPPs will be completed ahead of the Government time line. This is because of the clearances these projects come with.”

In addition to these four, 12 other UMPPS have been planned. Of them three projects — one in Orissa, Tamil Nadu and another one in Andhra Pradesh, may be earlier off the block, he said.

Referring to the current year target, Mr Nagarajan said “we expect to sanction about Rs 60,000-65,000 crore during the current financial year. We have signed with the Government to disburse about Rs 35,500 crore this year.”