India’s energy sector is in the middle of a massive transformation from traditional energy sources to green energy sources. The country is aiming for 500 GW of renewable capacity by 2030, strengthening transmission networks, and ensuring the financial viability of debt-ridden state distribution companies (DISCOMs). Financial institutions play a crucial role in this shift by providing long-term capital to the power ecosystem.
While private financiers and global ESG investors are stepping in, Power Finance Corporation (PFC) has become the backbone of India’s energy finance segment. Despite being one of the largest non-banking financial companies (NBFCs) in the country, PFC has often remained in the background by silently funding projects, ensuring liquidity for DISCOMs, and maintaining steady financial performance. In this blog, we will explore whether PFC is a silent performer in India’s energy story or not.
PFC’s Evolution From PSU Lender to Energy Finance Giant
PFC was established in 1986 to finance power sector projects involved in generation and transmission. Over the decades, it has evolved into a Navratna PSU and one of India’s leading public financial institutions. Today, PFC provides financial support across the entire electricity value chain, and the Power Finance Corporation share price has reached in excess of
₹390. It provides support for:
- Generation (thermal, hydro, renewables),
- Transmission and Distribution,
- Renovation & modernization of plants,
- Government-led schemes to strengthen rural and urban power supply.
Why PFC is a Silent Partner in India’s Energy Financing
Despite not receiving as much media attention as commercial banks, PFC has made a significant impact on India’s energy landscape. Some of the reasons making it a silent performer in the Nifty 100 are:
Strong Financial Performance
PFC’s performance in FY24–25 cements its position as a silent yet strong force in India’s power finance ecosystem. In its latest quarterly results of Q1 FY2025-26, its consolidated Profit After Tax surged 25% YoY to around ₹8,981 crore, one of the highest among Indian NBFCs. PFC consolidated loan asset book expanded to ₹11,34,347 crore, supported by higher disbursements to renewable and distribution segments. Also, its Net NPAs have reached their lowest level at 0.31%, significantly better than historical sector averages, reflecting PFC’s growth story in the past year.
Strategic Role in Government Schemes
As the nodal agency for flagship programs such as UDAY (Ujwal DISCOM Assurance Yojana) and RDSS (Revamped Distribution Sector Scheme), PFC ensures liquidity flow to financially stressed state DISCOMs. Without PFC’s consistent support, many utilities would struggle to meet operational and expansion costs.
Diversification Across the Power Value Chain
Earlier, PFC only used to finance thermal projects, but now it has diversified its financing streams and provides financing for several other projects as well, like smart grid initiatives, renewable energy projects, and rural electrification. Its ability to balance legacy commitments with future-ready projects makes it important to India’s energy transition story.
Competitive Fund-Raising Ability
Backed by the Government of India, PFC enjoys AAA domestic credit ratings and high global ratings, enabling it to raise low-cost capital through bonds, ECBs (External Commercial Borrowings), and green financing. In FY2024-25 alone, PFC mobilized record resources of 1,42,204 from both Indian and international markets.
Conclusion
Power Finance Corporation is the silent performer in India’s energy transition story, supporting power projects, keeping DISCOMs stable, and subtly pushing the country’s transition to sustainable energy.
The role of PFC in the Indian energy sector will further increase in the future as India aims to achieve 500 GW of renewable energy and strengthen its power sector. Even though it is silent, its impact cannot be overlooked, making it one of the most important factors facilitating India’s financial and energy future.
