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PFC Signs EUR 150 Million Loan Pact with Germany’s KfW to Support RDSS Projects.

Banking & Finance | Dated: 24 Aug 2025

In August 2025, Power Finance Corporation Limited (PFC), a ‘Maharatna’ Central Public Sector Enterprise (CPSE) under the Ministry of Power (MoP), signed a loan agreement worth EUR 150 million with Germany’s Kreditanstalt für Wiederaufbau (KfW). The loan will be used to strengthen India’s power distribution network under the Revamped Distribution Sector Scheme (RDSS).

🎯 Key Highlights:

  • - The agreement was signed in New Delhi between Parminder Chopra, Chairman and Managing Director (CMD) of PFC, and Stefan Wintels, Chief Executive Officer (CEO) of KfW. Also present was Gottfried von Gemmingen, Head of Division for Economic Affairs, German Embassy in New Delhi. This highlights the growing Indo-German cooperation in the field of energy transition and power reforms.
  • - The loan secured by PFC will specifically be channelled towards projects identified under the Government of India’s (GoI) Revamped Distribution Sector Scheme (RDSS), which was launched in 2021 with an overall outlay of ₹3,03,758 crore.
  • - RDSS aims to improve the operational efficiency and financial sustainability of India’s power distribution companies (DISCOMs) through infrastructure modernization and reduction of aggregate technical and commercial (AT&C) losses.

💡 Other Important Facts:

  • (i) This partnership is significant for India as it not only provides a strong financial push to the government’s flagship RDSS programme but also enhances bilateral energy collaboration between India and Germany. Germany has been a key partner in India’s energy transition journey, particularly in supporting renewable energy growth and energy efficiency programmes.
  • (ii) Funding from this EUR 150 million loan is expected to accelerate the implementation of smart meters, strengthen distribution infrastructure, and reduce power supply disruptions. This will ultimately contribute to the long-term goal of ensuring affordable, reliable, and sustainable electricity access across India.
  • (iii) The agreement reflects PFC’s role as India’s leading power sector financier and its growing international partnerships. With this loan, PFC continues to mobilize global financial resources to support domestic power reforms, aligned with India’s commitment to energy transition and reduction of carbon emissions under its Nationally Determined Contributions (NDCs).

📚 Test Your Knowledge:

Recently, Power Finance Corporation Limited (PFC) signed a loan agreement worth EUR 150 million with which German institution to support India’s RDSS projects?

Correct Answer: Kreditanstalt für Wiederaufbau (KfW)

🚀 Quick Recap:

About Power Finance Corporation Limited (PFC)

  • Chairman and Managing Director (CMD) : Parminder Chopra
  • Headquarters: New Delhi