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PFC{ Power Finance Corporation Limited}

BUSINESS PROFILE : Power Finance Corporation (PFC), a Government of India


undertaking under the administrative control of the ministry of power, provides a range of fund-based and non fund-based support to the Indian power sector. PFC was set up in July 1986 as a Financial Institution and was notified as a public financial institution in 1990. The chairman and managing director is V.K. Garg. PFC provides financial products and services like project term loans, lease financing, direct discounting of bills, short term loans, consultancy services, ..etc., for various power projects in the generation, transmission, distribution sectors as well as for renovation and modernization of existing power projects. PFC is a long-term financier for the power sector and lends mainly for projects in generation, transmission and distribution of power. It also lends to renovation and modernization projects. The generation segment, thermal and hydel, accounts for two-thirds of its outstanding loans while transmission and distribution segments account for 11% and 6% respectively. The company along with ministry of power is working together on nine ultra mega power projects (UMPP) each having capacity of about 4,000 MW. The company spearheads the government`s ambitious push for UMPP and has floated separate special purpose vehicle subsidiaries for each of the identified UMPP projects. These subsidiaries are responsible for securing all statutory clearances and will be transferred to the successful bidders of these projects. The clients of the company include state power utilities, central power sector utilities, power departments, private power sector utilities (including independent power producers), joint sector power utilities, power equipment manufacturers and power utilities run by local municipalities. The registered office is at Urjanidhi, 1, Barakhamba Lane, Connaught Place, New Delhi-110001

PFC was incorporated with an objective to provide financial resources and encourage flow of investments to the power and associated sectors, to work as a catalyst to bring about institutional improvements in streamlining the functions of its borrowers in financial, technical and managerial areas to ensure optimum utilization of available resources and to mobilize various resources from domestic and international sources at competitive rates.

Products & Services


PFC's product portfolio comprise of Financial Products and Services like Project Term Loan, Equipment Lease Financing, Discounting of Bills, Short Term Loan, and Consultancy Services etc. for various Power projects in Generation, Transmission, and Distribution sector as well as for Renovation & Modernization of existing power projects. PFC's priorities include not only accelerating the pace of existing business of funding generation, transmission and distribution projects but also to exploit the new opportunities available in the area of consortium lending, lending to Capital equipment manufacturers and fuel supply projects and related infrastructure development projects, renewable energy and CDM, and equity funding. In addition, PFC also provides technical, advisory and consultancy services related activities through its subsidiary company namely PFC Consulting Limited. Power Finance Corporation Ltd.

Borrowings
The major parts of PFCs funds are raised through Rupee denominated bonds. PFC bonds enjoy the highest credit rating in the Indian market and in international markets, they are rated at par with the Indian Sovereign rating. It also borrows short term and long term from various banks and other Financial Institutions. It has also raised External Commercial Borrowings (ECB) through private placement in US market.

Operations
Since its inception, PFC has been providing financial assistance to power projects across India including generation, transmission, distribution and RM&U projects. Recently, it has forayed into financing of other infrastructure projects which have backward linkages to the power sector like coal mine development, fuel transportation, oil & gas pipelines etc. The borrower profile includes State Electricity Boards, State sector power utilities, Central sector power utilities and Private sector companies. PFC is also the nodal agency for the implementation of the ambitious Ultra Mega Power Plants (UMPPs) and the R-APDRP programme [2] of Govt. of India. The company also has the mechanism of rating different state Power Utilities on its performance.

Awards & recognitions


No. 1 2 3 4 Recognition KPMG-Infrastructure Today Award India Power Award Golden Peacock Award 2007 Navratna Company Year December 2008 November 2008 September 2007 June 2007

AWARDS

Shri Satnam Singh, CMD, PFC receiving the SCOPE Commendation Certifi cate in the category of Best Managed Bank, Financial Institution or Insurance Company for the year 2009-10 from H.E. President of India Smt. Pratibha Devisingh Patil on 11th April, 2011.

Shri Satnam Singh, CMD, PFC receiving the MoU Award for Excellence in Performance in the category of Excellence in Financial Services Sector for the year 2008-09 from Honble Prime Minister of India Dr. Manmohan Singh on 15th Dec, 2010.

Ratings
Excellence in performance of your Company is also reflected in consistently obtaining the highest MoU rating i.e. "Excellent" from Govt. of India. PFCs international credit rating has been pegged at that of Sovereign by leading overseas credit rating agencies such as Standard & Poors (S&P), Moodys and FITCH. On the domestic front, your Company got the highest safety ratings from reputed agencies like CRISIL & ICRA for its specific resource mobilization programme. Consistently high ratings by the Govt. of India as well as leading Indian and International rating agencies bears testimony to PFCs stature as an Institution with strong fundamentals and inherent financial strength. PFC has also obtained ISO 9001: 2008 certifications in fiscal 2010 reflecting our commitment to quality service to our clients.

Future Strategy
Your Companys future strategy will be to accelerate growth by expanding the business in the core sector i.e. power sector and also by spinning off the new business units / subsidiaries into individual companies with significant income stream, which will remain focused exclusively in their domain of operations. As a part of Corporate Plan, we have identified other potential business areas like foray into banking, international markets, insurance, capacity building initiatives, strategic alliances with domestic and international institutions etc., whose feasibility will be explored to fuel the growth of your Company as we go along.

While your Company is committed to accelerate growth as in the past, your Company will continue to achieve the best standards of Corporate Governance with emphasis on authority and freedom of the management coupled with transparency, accountability and professionalism in their working with the aim of enhancing long term economic value of all the stakeholders and the society at large.

CREDIT RATINGS
Ratings
International
Moody's - Baa3(Sovereign) Standard & Poor's - BBB-(Sovereign) Fitch- BBB- (Sovereign)

Domestic
CRISIL - AAA(Highest Safety) ICRA - LAAA(Highest Safety)

Type Public Traded as BSE: 532810 Industry Founded Financial services July 1986 NSE: PFC

Headquarters New Delhi, India Area served Key people Products Revenue India Mr Satnam Singh (Chairman & Managing Director) Rupee Term Loan, Foreign Currency Loan, Short Term Loan USD 1.82 bn (Apr'10) USD 684.6 mn (Apr'10)

Operating income

Net income Total assets Total equity Owner(s) Employees

USD 535.3 mn (Apr'10) USD 18.15 bn (Apr'10) USD 2.87 bn (Apr'10) Government of India 330

SERVICES OFFERED:
The services offered by PFCCL are broadly classified as under: 1. Procurement of Power by Distribution Licensees through Tariff Based Competitive Bidding 2. Govt. of India initiatives like UMPPs, ITPs 3. Renewable and NonConventional Energy Schemes 4. Coal Block JVs and selection of developers for Coal blocks and linked Power Projects 5. Project Advisory including Selection of EPC Contractor 6. Reform, Restructuring, and Regulatory aspects 7. Capacity Building and Human Resource Development