CCI Sanctions PFC’s Acquirement of 52% Stake in REC

The Competition Commission of India has announced that it has approved Power Finance Corporation’s (PFC) acquirement of 52% stake in Rural Electrification Corporation (REC). In December 2018, the purchase received an in-principle sanction from the Cabinet Committee on Economic Affairs (CCEA).

Both REC and PFC are government-owned non-banking financial companies (NBFCs) that endow with financing to power projects in India.

The government’s shareholding in PFC and REC has condensed by roughly five percent between the September and December quarters last year.

In March 2018, Power Minister R.K. Singh directed REC and PFC not to award loans to distribution companies which were making heavy losses (above 15 per cent) except they chalk out a plan to reduce them. The minister noted that numerous DISCOMs have been making heavy transmission and distribution (T&D) losses and it may be complicated for them to reimburse the loans.