Annexure B

ANNEXURE - B
PARTICULARS OF THE ORGANIZATION, FUNCTIONS AND DUTIES
DETAILS OF THE ORGANIZATION
NAME OF THE ORGANIZATION POWER FINANCE CORPORATION LTD.

Address of the Registered Office 'Urjanidhi' ,
1, Barakhamba Lane,
Connaught Place,
New Delhi – 110 001
CIN U65910DL1986GOI024862
Telephone No. 91-11-23456000
Fax No. 91-11-23412545
Website www.pfcindia.com,www.pfc.gov.in
TYPE
Public Sector Undertaking under the administrative control of Ministry of Power.
BRIEF INTRODUCTION
POWER FINANCE CORPORATION LIMITED is a Govt. of India undertaking set

up in July 1986 as a Financial Institution (FI) dedicated to Power Sector financing
and committed to the integrated development of the power and associated
sectors by channeling the resources and providing financial technological and
managerial services for ensuring the development of economic, reliable and
efficient systems and institutions. The Corporation was declared a Public
Financial Institution in 1990 under sec 4(A) of the Companies Act 1956. The
Corporation was registered as a NBFC by RBI in 1998.
Year of Establishment: POWER FINANCE CORPORATION LIMITED was set

up in July 1986.
Objective: The objects to be pursued by the company are
1) To finance power projects, in particular thermal and hydro-electric projects.
2) To finance power transmission and distribution works.
3) To finance renovation and modernization of power plants aimed at improving

availability and performance of such plants.
4) To finance system improvement and energy conservation schemes.

5) To finance maintenance and repair of capital equipment including facilities for
repair of such equipment, training of engineers and operating and other
personnel employed in generation, transmission and distribution of power.
6) To finance survey and investigation of power projects.
7) To finance studies, schemes, experiments and research activities associated

with various aspects of technology in power development and supply.
8) To finance promotion and development of other energy sources including

alternate and renewable energy sources.
9) To promote, organize or carry on consultancy services in the related activities

of the Company.
10) To finance manufacturing of Capital equipment required in power sector.
11) To finance and to provide assistance for those activities having a forward and
backward linkage, for the power projects, including but not limited to, such as
development of coal and other mining activities for use as a fuel in power
projects, development of other fuel supply arrangements for power sector,
electrification of Railway lines, laying of railway lines, roads, bridges, ports and
harbors, & to meet such other enabling infrastructure facilities that may be
required.
12) To finance the transitional financing needs of state power utilities undertaking
Restructuring.
13) To assist the state power utilities to improve their physical and financial
performance.
14) To assist the states to undertake Reforms and Restructuring exercise.
15) To assist the state power utilities in achieving compliance of statutory

requirements arising out of Electricity Act 2003 and Electricity Regulatory
requirements.
MAIN ACTIVITIES:
Providing Financial Services:
Term Loans-It covers financial assistance to power projects including

Thermal and Hydro generation projects, survey and investigation of power
projects, system improvement and energy conservation schemes,
renovation and modernization of power plants etc. The maturity and
moratorium of term loans will primarily depend on the type of scheme put
up by a utility. The extent of financing ranges from 70% to 100% of project
cost to Central/State Sector utilities and 20% to 50% to private sector
companies.
Lease Financing-Under schemes for financial leasing of power

equipment, any equipment or machinery essential for power projects and
associated works is covered. The extent of financing is 100% of the cost of
equipment. The period of lease ranges from 3 to 10 years
.
Direct Discounting of Bills-The credit is available to all equipment
manufacturers to enable them to sell their equipment on deferred payment
terms to the purchasers of power sector.
Under the scheme, the delivery of equipment or machinery is made by the
seller to the purchaser against bills duly accepted/guaranteed by
purchaser’s banker. Duly executed bills are discounted by the seller with
PFC so that the seller gets immediate payment while the purchaser gets
the facility of deferred payment terms. The extent of financing is 100% of
the bill submitted.
Guarantee Services- As the fund requirements for the power sector are
enormous and many funding agencies insist on guarantee by an Indian
Financial Institution (FI), PFC has started providing guarantee services
subject to its satisfaction about the borrowers credibility. The extent of
financing under this scheme is 15% over and above the sanctioned limit of
terms loan.
Loan Syndication- For effective arrangement of funds and appraisal,
PFC has started considering loan syndication with other leading Financial
Institutions (FIs), like M/s IFCI,ICICI etc. The extent of financing is same as
of term loan.
Short Term Loan –PFC opened up a new window for Short Term loan
with a view to broad base its loan portfolio for improved client servicing and
to assist state utilities who otherwise depended on high cost Short Term
Loan from Commercial Banks. At present the extent of financing under this
scheme ranges from 75 crores to 150 crores. The minimum period of short
term will be 90 days and maximum period will be 180 days.
Procedure for availing the above services- The borrower will submit
requests for services in the format prescribed for the purpose by PFC and
is available on PFC web site: www.pfcindia.com However application and
www.pfc.gov.in forms for availing loan facility for short-term loan, direct
discounting of bills are available with Policy and Concurrence Unit.
INSTITUTIONAL DEVELOPMENT SERVICES
ACTING AS AN INSTRUMENT FOR URSHERING IN REFORMS IN THE

STATE UTILITIES BOTH FINANCIAL SERVICES -PFC has been providing
support to help power utilities improves their technical, financial and managerial
skills to make this vital sector of economy efficient, self sustaining and to adapt
itself to the dynamic changes taking place. This includes support for engagement
of consultant etc. to facilitate the process of reforms/restructuring of the
utilities, holding workshops on critical issue; to support expeditious
implementation of the Private Power Development Initiative of Gol through
development of model documents like Power Purchase Agreement
(PPAs), Distribution Privatization agreements etc.
UTILITY DEVELOPMENT PLANS- In order to ensure that benefits arising
from the lending operations endure, PFC has been addressing to the
problem of unsatisfactory performance of the State Power Utilities through
methodical formulation and implementation of Operational and Financial
Action Plan (OFAP). OFAP document based on diagnostic study
encompasses in different areas of functioning of the power utilities. It is
prepared in consultation and agreement with the utility and the State
Government concerned. The thrust on OFAP and its linkages with the PFC
assistance has brought about quantitative as well as qualitative changes in
the performance of the utilities.
FINANCIAL ASSISTANCE FOR POWER SECTOR STUDIES-In line with

its development role, Power Finance corporation (PFC) provides technical
and financial assistance by strategically providing grants, interest free
and/or concessional loans to carry out the following studies:
1. Reform & restructuring related studies.

2. Pre-investment studies for project preparation formulation and
supervision implementation etc.
3. Studies for accessing the load Growth, Demand Pattern etc.
4. Systems improvement in transmission and distribution and
Demand side Management.
5. Renovation & Modernization/ Renovation & Uprating/Residual life
Assessment studies for refurbishment of power plants.
6. Institutional development related studies.
REFORMS & RESTRUCTURING OF SEBs-PFC has been actively

persuading State Govt. to reforms and restructuring of their power sector in
order to make them commercially viable. PFC is therefore following the
policy for providing technical and financial support to states initiating
reforms & restructuring in their power wherein a comprehensive financial
package is offered. In case of state going in for reforms with PFCs
technical and financial assistance, this package can be as high as 80% of
their total investment needs. This will be linked to having a reform
Operational & Financial Action Plan (OFAP) with milestones and
investment plans.
OTHER SERVICES:
Consultancy Services- The goal of consultancy services is to provide
quality consultancy services for the power and financial sectors and to
achieve customer satisfaction through timely and successful completion of
assignments. Fee based consultancy services were launched by PFC to
power & financial sectors with the main objective of providing a range of
services to both state owned power utilities, State Electricity Regulatory
Commissions, State Governments, Electricity Departments and Private
Sector participants.
The range of services offered by PFC include Re-structuring and reform

activities, operationalisation of reformed entities, Financial Management of
resources including mobilization and accounting systems, Projects
structuring/planning/development/specific studies, implementation,
monitoring, efficiency improvement projects for both state owned utilities
and IPPs, Development of sustainable Human Resource Plan,
Communication and Information Dissemination, Information Management
system.
OTHER ACTIVITIES
Raising resources from domestic and international market

Servicing of Bond holders and protecting the interest of Bond holders by
appointment of trustees
Disbursement of loan to qualifying borrowers after sanction as per
disbursement procedure
Dealing with Banks and Financial Institutions
Settling claims of third parties/other service providers.
OTHER ACTIVITIES OF CONSUMER

Meeting of the executives and State Power Utilities and state govt. are organized
by the Corporation twice in a year to know their difficulties/ suggestions for
improving/ strengthening the relationship.

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ANNEXURE - B

PARTICULARS OF THE ORGANIZATION, FUNCTIONS AND DUTIES

DETAILS OF THE ORGANIZATION

NAME OF THE ORGANIZATION POWER FINANCE CORPORATION LTD.

Public Sector Undertaking under the administrative control of Ministry of Power.

POWER FINANCE CORPORATION LIMITED is a Govt. of India undertaking set

Year of Establishment: POWER FINANCE CORPORATION LIMITED was set

Objective: The objects to be pursued by the company are

1) To finance power projects, in particular thermal and hydro-electric projects.

2) To finance power transmission and distribution works.

3) To finance renovation and modernization of power plants aimed at improving

4) To finance system improvement and energy conservation schemes.

6) To finance survey and investigation of power projects.

7) To finance studies, schemes, experiments and research activities associated

8) To finance promotion and development of other energy sources including

9) To promote, organize or carry on consultancy services in the related activities

10) To finance manufacturing of Capital equipment required in power sector.

14) To assist the states to undertake Reforms and Restructuring exercise.

15) To assist the state power utilities in achieving compliance of statutory

Providing Financial Services:

Term Loans-It covers financial assistance to power projects including

Lease Financing-Under schemes for financial leasing of power

ACTING AS AN INSTRUMENT FOR URSHERING IN REFORMS IN THE

FINANCIAL ASSISTANCE FOR POWER SECTOR STUDIES-In line with

1. Reform & restructuring related studies.

REFORMS & RESTRUCTURING OF SEBs-PFC has been actively

The range of services offered by PFC include Re-structuring and reform

Raising resources from domestic and international market

OTHER ACTIVITIES OF CONSUMER

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