India’s Power Finance Corp. Ltd. is looking for new sectors to fund as it wants to hedge the risks associated with lending to the nation’s ailing utilities, according to people familiar with the matter.
The country’s top lender to electricity projects is exploring new areas including railway electrification, electric vehicles and charging infrastructure, as well as gas import terminals or coal mines that serve a power plant, said the people, who asked not to be identified as the plan is still under discussion.
The move is triggered by higher risks of default in India’s power sector amid mounting losses at distribution companies, fuel shortages and project delays, according to the people. The business is also affected by weaker growth in generation capacity, especially at thermal and hydroelectric projects, the people said.
Power Finance couldn’t immediately comment when contacted on Tuesday. India’s distributors are saddled with huge debts from selling power below cost or from poor billing and collection. Read More
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