State-owned Power Finance Corp may issue tax-free bonds to raise Rs 5,000 crore in the current financial year to finance lending to power projects.
“We are awaiting the Ministry of Finance’s nod to allow Power Finance Corp to raise Rs 5,000 crore through tax-free bonds in the current fiscal,” a senior Power Ministry official said, adding that the approval can be expected in a day or two.
This step would bring down interest costs - the interest at which PFC borrows from the market for further lending - for the company. “It may bring the interest cost down by about 1.5 per cent for the company,” the official said.
Power Finance Corp is engaged in financing power generation and transmission projects. The company’s borrowing target for the current financial year is Rs 30,000 crore.