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POWER FINANCE CORPORATION LIMITED (Government of India Undertaking)

POWER FINANCE CORPORATION LIMITED (Government of India Undertaking). Presentation on “Initiatives of Government of India in Power Sector” At BRICS FORUM, Chennai By Shri Rajeev Sharma, CMD 18 th November, 2016. Structure of Presentation. Funding for brighter tomorrow.

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POWER FINANCE CORPORATION LIMITED (Government of India Undertaking)

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  1. POWER FINANCE CORPORATION LIMITED (Government of India Undertaking) Presentation on “Initiatives of Government of India in Power Sector” At BRICS FORUM, Chennai By Shri Rajeev Sharma, CMD 18th November, 2016

  2. Structure of Presentation Funding for brighter tomorrow

  3. Power Sector Overview (1/2) As on 31.10.2016 (In MW) • All India Installed Capacity (MW) • Summary of Capacity Addition Targets for XII Plan • Per capita power consumption at 1075 kWh - Low as compared to world average(2015-16) • Present Peak shortage – 3.20% (2015-16) • Present Energy shortage – 2.10% (2015-16) • All Indian Average PLF – 58.13% (Sep 2016) In MW Funding for brighter tomorrow

  4. Power Sector Overview (2/2) • Increase in demand of power due to following factors • Rural Electrification • GDP Growth Rate • 24x7 Power for All • Changing landscape of Indian power sector & recent developments • Increasing share of private sector in capacity addition • 9% in X Plan • 42% in XI Plan • Expected to be more than 60% in XII Plan • Fuel related issues • Inadequate availability of domestic coal and domestic natural gas • Difficulty in obtaining clearances for coal mines • Inadequate fuel supply agreements for coal • De- allocation of coal mines • Time, Cost over run and funding related issues • PPA related issues • Land acquisition related issues • Poor financial health of state distribution companies Funding for brighter tomorrow

  5. Long Term & Medium Term Demand Projections Long Term Power Sector Projections It is estimated to sustain 7.4%GDP growth till 2047(NitiAayog Report Apr, 2015).  Installed capacity needs to increase from current levels of 300 GW to • 562 GW by 2030 • 1,112 GW by 2047 Medium Term Projections Next 5 years power sector requires USD 294 billion investment • Out which USD 118 billion investment is required in renewables (Renewable capacity of 175 GW by 2022) There is no doubt that huge investments are required. However, the investments flowing into the power sector will depend on the reform measures / structural changes improving the overall attractiveness of the sector. Funding for brighter tomorrow

  6. Overview on PFC • 1986 : Set up by GoI as dedicated Financial Institution for Power Sector • 1990 : Declared as Public Financial Institution (PFI) • 1998 : Registered as NBFC with RBI • 1998 : Declared as a “Mini Ratna Category-I” PSE by GoI • 2007 : Declared as a “Navratna” PSE by GoI • 2010 : Categorized as NBFC-ND-IFC by RBI (Infrastructure Finance Company) • Allows 5% additional lending exposure Ownership • 1986 : 100% owned by Govt. of India • 2007 : 89.78% Government holding – Post IPO (over subscribed 77 times) • 2011 : 73.72% Government holding – Post FPO (over subscribed 4.3 times) • 2014 : 72.80% Government holding – Post ETF (Exchange Traded Fund) • 2015 : 67.80% Government holding – Post 5% Disinvestment (over subscribed 2.34 times) Funding for brighter tomorrow

  7. Financial Performance at a Glance (As on 31.03.2016) Funding for brighter tomorrow

  8. Contribution to Power Sector Key role in Implementation of GoI Flagship programmes • Nodal Agency for AG&SP Scheme in IX & X Plan • Counter-part funding agency for APDRP Scheme in X Plan • Nodal Agency for development of UMPPs • Bid Process Co-ordinator for development of ITPs • Nodal Agency for Restructured APDRP Scheme Funding for brighter tomorrow

  9. Opportunity to invest in power sector Various fund initiatives of Govt. of India • Indian Renewable Energy Fund (IREF) – USD 1to 1.5 billion • PFC in principle agreed to invest USD 100 million • Renewable Energy Certificate Fund – providing long tenure low cost fund to stressed hydro projects • Fund for supporting small hydro projects • Stressed Asset Equity Fund (SAEF) • Stressed Asset Lending Fund (SALF) Masala Bonds – Plan to raise USD100 million • Plan to raise Masala Bonds in Nov-Dec, 2016 subject to competitive pricing Funding for brighter tomorrow

  10. Initiatives of Government of India UMPPs – PFC nodal Agency (UMPPs: 4 transferred, 4 fast track and others in pipeline) • Aims to deliver low cost power through • Competitive tariff due international tariff based bidding • Economies of scale benefits as each project is ~ 4000 MW each • Higher efficiency due to Super critical technology IPDS(R-APDRP subsumed)Outlay $ 9.6 billion & sanctioned $ 9.4 billion • Strengthening of power distribution sector in urban area Funding for brighter tomorrow

  11. Initiatives of Government of India DeenDayalUpadhyaya Gram Jyoti Yojana (DDUGYY) • Feeder segregation for 24X7 power (separate line for farmers) • Strengthening Sub T&D in rural areas Scheme Outlay : $ 11.2 billion (Sanctioned : $ 10.9 billion) Scheme Outcome: 8 hours of quality power supply to farmers & 24-hour electricity to households UJWAL DISCOM ASSURANCE YOJANA (UDAY) A scheme for turnaround of DISCOMs (notified Nov, 2015) aims at • Reduction of AT&C loss to 15% by 2018-19 • Reduction in gap between ARR & ACS to zero by 2018-19 • Almost all DISCOMs to be profitable by 2017-18, remaining 3-4 by 2018-19 Funding for brighter tomorrow

  12. Initiatives of Government of India Push to Renewables Target by 2022 : 100 GW of solar and 60 GW of wind energy • Solar projects 20,900 MW tendered • Green Energy Corridors of $ 5.6 billion envisaged for transmission of renewable energy • 33 Solar parks in 20 states are envisaged 24X7 Power For All (PFA) by 2019 - Uninterrupted power supply 24X7 A comprehensive programme encompasses overall development of power sector including reforms at all India level • Envisages building generation, transmission and distribution capacities • Operational efficiency & reform measures Funding for brighter tomorrow

  13. Initiatives of Government of India AMENDMENTS IN THE TARIFF POLICY (Jan, 2016)– giving push to • PFA : State Govts/Regulators to ensure PFA, micro grids to connect remote areas • Efficiency : to expand existing power plants, install smart meters enabling “time of day” & net metering, creation of transmission lines across India • Environment : RPO of 8% by 2022, RGO, hydro projects through long term PPAs and exempt from competitive bidding till 2022 • Ease of doing business: allows pass through for any change in domestic duties, levies, cess and taxes in competitive bid projects, clarity on tariff setting authority in multi-state sale etc. Funding for brighter tomorrow

  14. Impact of Government of India Schemes IPDS(R-APDRP subsumed) Progress • IPDS Sanction $ 3.8 billion for 3,597 Towns for 30 States/UTs in about a year • 1,228 towns achieved Go-Live under R-APDRP • 17 states have reported Go-Live of 100% towns • 923 out of 1,228 Go Live towns reported AT&C loss reduction upto> 25% DeenDayalUpadhyaya Gram Jyoti Yojana (DDUGYY) Progress: Out of 18,452 villages to electrified • 59% electrified (10865 Towns) • 21% in progress (3,840 Towns) • 16% yet to start (2,995 Towns) Funding for brighter tomorrow

  15. Impact of Government of India Schemes UJWAL DISCOM ASSURANCE YOJANA (UDAY) Progress • 16 States / 1 UT signed UDAY MoU – (Raj, UP, Chats, Jhark, Punj, Bihar, Haryn, Guj, Uttara, J&K, Goa, Karnataka, AP, Maha,MP,Manipur, Pudcherry) • Bonds raised under UDAY – $ 26.8 billion till date • Total DISCOM Liabilities : $ 31.8 billion (as on 30 Sep, 2015) • Bonds Issued: $ 26.8 billion (almost 84% bonds have successfully subscribed) Physical Progress on UDAY • 16 States / 1UT signed UDAY MoU • Bonds of $ 26.8 billion (84% of UDAYDebt) have been issued & subscribed • 95% of feeder monitoring work is complete in UDAY States • Feeder segregation 48% achieved (target to complete by Mar, 2018) • At least 8 States have significantly narrowed gap between ACS & ARR • 12 States have reduced AT&C losses Funding for brighter tomorrow

  16. Impact of Government of India Schemes • 24X7 Power For All (PFA) by 2019 • Progress • 28States / 6 UTs already signed PFA documents • 2 States are finalizing documents(UP &TN) Funding for brighter tomorrow

  17. THANK YOU Funding for brighter tomorrow

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