Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

PFC Secures €150 Million Loan from KfW to Support India’s Power Distribution Reforms

Power Finance Corporation (PFC) has signed a €150 million loan agreement with Germany’s KfW Development Bank to fund projects under the government’s Revamped Distribution Sector Scheme (RDSS). The financing will support India’s push toward modernizing power distribution through smart metering and digital infrastructure. As of February 2025, 8.76 million smart meters have been installed under the scheme.

This follows other significant international financing, including a JPY120 billion credit line set up with the Japan Bank for International Cooperation (JBIC) in January 2025, highlighting the strong interest of global lenders in India’s power and renewable energy sectors. In FY 2025, PFC disbursed Rs1.68 trillion in loans, with 77% directed to the government sector and the rest to private companies, while its total loan assets reached Rs5.43 trillion.

PFC’s borrowing mix as of March 2025 included Rs888.77 billion in rupee term loans (19%), Rs891.32 billion in foreign currency borrowings (19%), and Rs2.61 trillion in domestic bonds (56%). The Ministry of Power has also launched a task force to establish the India Energy Stack under RDSS, aiming to create a unified digital infrastructure for the energy sector. Meanwhile, the ministry has sought a two-year extension of RDSS to strengthen operational efficiency and financial discipline in the power distribution network.