PFC Secures largest-ever foreign currency term loan of USD 1.265 billion

Current Context: Power Finance Corporation (PFC) secured its largest-ever foreign currency term loan of USD 1.265 billion on October 4, 2024.

• Here are the key details about this significant development:
• Purpose: The loan is intended to support PFC’s various projects and initiatives, particularly in the renewable energy sector. This aligns with India’s broader goals of enhancing its renewable energy capacity and reducing carbon emissions.
• Lenders: The loan was syndicated by a consortium of international banks, showcasing strong global investor confidence in PFC’s financial health and strategic direction.
• Tenure and Terms: The loan has a tenure of five years, with competitive interest rates that reflect PFC’s robust credit profile. The terms of the loan are designed to provide PFC with the flexibility needed to manage its financial commitments effectively.
• Impact: This loan will significantly bolster PFC’s ability to finance large-scale infrastructure projects, particularly in the power sector. It also underscores the company’s commitment to supporting India’s energy transition and infrastructure development.
• Strategic Importance: Securing such a substantial loan from foreign lenders highlights PFC’s strong position in the global financial market and its ability to attract international capital for its projects.

Question:

1 What is the primary purpose of the USD 1.265 billion foreign currency loan secured by Power Finance Corporation (PFC) on October 4, 2024?

• A) To finance urban development projects
• B) To support projects in the renewable energy sector
• C) To expand PFC’s global office network
• D) To invest in digital transformation of financial services

Answer: B) The loan is intended specifically for PFC’s renewable energy projects, aligning with India’s goals of enhancing renewable energy capacity and reducing carbon emissions.