Image Credit: Power Finance Corporation (PFC) Limited
India’s drive to modernise its electricity distribution network has gained momentum with Power Finance Corporation (PFC) Limited signing a €150 million loan agreement with German development bank KfW on 21 August. The financing will support projects under the Government of India’s Revamped Distribution Sector Scheme (RDSS), which seeks to enhance the efficiency, reliability, and sustainability of power distribution across the country.
Strengthening Indo–German Energy Cooperation
The deal reflects the growing energy collaboration between India and Germany, particularly in areas of clean energy and sustainable infrastructure. KfW, Germany’s largest promotional bank, has been a long-standing partner in financing India’s power sector reforms, particularly in renewable energy and distribution infrastructure.
“This collaboration is yet another step towards consolidating Indo–German cooperation in clean and sustainable energy,” officials said, adding that the loan facility reflects both nations’ commitment to decarbonisation and power sector resilience.
Financing Distribution Reforms under RDSS
Launched in 2021 with an outlay of ₹3,03,758 crore, the RDSS aims to reduce losses in the distribution sector, improve consumer services, and restore financial viability to distribution companies (DISCOMs). The loan from KfW, facilitated through PFC, will provide much-needed capital to strengthen networks and modernise infrastructure in line with these objectives.
By addressing long-standing inefficiencies in India’s distribution sector, the PFC–KfW partnership is expected to accelerate reforms while delivering tangible benefits to millions of electricity consumers nationwide.
Leaders Emphasise Shared Vision
The loan agreement was formally signed by Parminder Chopra, Chairman and Managing Director of PFC, and Stefan Wintels, CEO of KfW, in the presence of Gottfried von Gemmingen, Head of Division for Economic Affairs at the German Embassy in New Delhi.
Highlighting the significance of the agreement, Chopra said: “PFC has been at the forefront of financing and enabling reforms in India’s power distribution sector. This new line of credit will help realise the government’s vision of ensuring reliable, affordable, and sustainable power supply to consumers across the country. We also look forward to working with KfW in new and emerging areas, especially renewables and clean energy, thereby advancing India’s energy transition.”
About PFC
Power Finance Corporation, a Navratna PSU under the Ministry of Power, is the country’s leading financial institution dedicated to the power sector. Headquartered in New Delhi, it provides financing for generation, transmission, distribution, and renewable energy projects, and has been instrumental in strengthening India’s electricity infrastructure.
A Broader Partnership in Clean Energy
The latest funding highlights how Indo–German cooperation is playing a role in India’s energy reform agenda. Beyond this loan, Germany has supported India through technical and financial collaborations in renewable energy, energy efficiency, and grid modernisation. The PFC–KfW agreement adds a new dimension to this partnership, underscoring both nations’ commitment to accelerating the energy transition and achieving sustainable growth.
