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PFC forays into airport financing, sanctions loan for greenfield airport in AP

Its annual report for FY23 said the company has taken a significant step towards diversification by entering the broader infrastructure sector (File Photo: Mint)
Its annual report for FY23 said the company has taken a significant step towards diversification by entering the broader infrastructure sector (File Photo: Mint)

Summary

  • This is part of the power-sector lender's plan to diversify its loan book by venturing into the broader infrastructure sector

New Delhi: The state-run Power Finance Corporation (PFC) has forayed into funding airport projects and sanctioned its maiden financing for a greenfield airport project in Andhra Pradesh. This is part of the power-sector lender’s plan to diversify its loan book and venture into funding other types of infrastructure projects, as Mint reported earlier. The power-sector lender has been diversifying its loans portfolio to areas such as e-mobility, metro rail, irrigation and utility scale energy storage, among others.

The company said on Tuesday that at a recent meeting in Shillong, the board of directors sanctioned loans amounting to 15,000 crore for various projects, including the airport. "As part of its diversification strategy and funding for infrastructure projects, PFC sanctioned its maiden financing for a Greenfield Airport project in Andhra Pradesh," it said.

The board also reviewed strategic agendas pertaining to the company’s business diversification strategy, including exploring avenues for expanding the business into new market segments and accelerating funding in the renewable energy space, the current domestic and international market scenario and its impact on PFC’s borrowing costs, and strengthening internal systems to improve asset quality.

Diversifying

Mint reported earlier that PFC has been diversifying its loans portfolio to new areas. We reported on 28 May, citing sources, that PFC was in talks with Oman’s Galfar group, which will be developing the stretch of the new National Highway-52 (old NH-65), passing through Salasar, Rajasthan, to the Haryana border.

The previous month, the company approved a 633 crore loan to Gensol Engineering Ltd for the acquisition of 5,000 passenger EVs and 1,000 cargo EVs to venture into the e-mobility segment.

Its annual report for FY23 said the company has taken a significant step towards diversification by entering the broader infrastructure sector. "This strategic shift represents a long-term endeavour to enhance portfolio diversification and foster growth of our loan asset book. With a forward-looking perspective, we have designed this venture to create a more robust and resilient financial position while capitalising on the evolving demands of the market," it said.

"Our commitment to maintaining a balanced portfolio is evident in our policy of lending up to 30% of the outstanding loan book, conditional on two-thirds of the new sanctions in a financial year being towards the power sector," read the annual report.

At 1.25 pm, shares of PFC were trading at 248.90 on the BSE, down 1.19% from their previous close.

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