What is the expected size of the loan book after the PFC and REC merger?

The merged entity is expected to have a loan book of approximately ₹11.5 lakh crore.

What types of projects will the new power finance entity fund?

The new entity will focus on funding large-scale and complex projects in the power and related infrastructure space, including AI-enabled data centers.

Who is overseeing the merger of PFC and REC?

The Power Ministry has created a three-member high-level committee to monitor the progress of the proposed merger between PFC and REC.

Home / Business and Economy / PFC, REC Merger: Power Financing Behemoth Emerges

PFC, REC Merger: Power Financing Behemoth Emerges

19 Feb

•

Summary

Merger of PFC and REC will create a $11.5 lakh crore financing power sector giant.
New entity will fund large projects including AI-enabled data centers.
Merger approved in-principle by PFC and REC boards; Finance Minister proposed.

PFC, REC Merger: Power Financing Behemoth Emerges

India's power sector is poised for a major transformation with the proposed merger of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). This amalgamation is set to create a formidable financial entity, managing a combined loan book estimated at ₹11.5 lakh crore. This scale rivals that of major Indian banks, positioning the new company as a key financier for substantial infrastructure projects.

The merged corporation will focus on critical areas such as distribution, conventional and renewable energy generation, transmission, and infrastructure development. Notably, it will also venture into financing emerging technologies like AI-enabled data centers, signaling a forward-looking approach to energy and digital infrastructure. The Finance Minister's proposal in the FY27 Budget has paved the way for this strategic consolidation, with both PFC and REC boards granting their in-principle approval earlier this month.