DMK MP seeks 1.5% cut in PFC, REC loan rates for state power utility, ETEnergyworld

DMK MP R Girirajan on Friday urged the Centre to reduce interest rates on loans from Power Finance Corporation (PFC) and REC Ltd by at least 1.5 percentage points to ease the financial burden on Tamil Nadu Generation and Distribution Corporation (TNGEDCO).

Raising the issue during Zero Hour in the Rajya Sabha, Girirajan said TNGEDCO, which operates power projects with a total installed capacity of over 45,000 MW, pays approximately ₹7,000 crore annually as interest on loans from central institutions at rates ranging from 9.5 per cent to 12.65 per cent.

“TNGEDCO is one of the best discoms in the country. As the sole distributor of electricity in Tamil Nadu, it ensures that power reaches homes, businesses and industries efficiently,” the MP said.

He said the Tamil Nadu government has urged PFC and REC to bring down the interest rate on TNGEDCO’s loans to 8 per cent. “With the interest rate reduction, the annual interest burden could significantly decrease,” Girirajan said.

The MP said TNGEDCO has been working on restructuring its debt and improving financial performance, with a projection to break even within three financial years. The state government has also called for a new comprehensive debt restructuring scheme for the power utility.

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