Indian state power lenders PFC and REC announce merger to boost energy financing
India's Power Finance Corporation and REC will merge to create a massive state-run lender. The move aims to support the nation's growing clean energy goals.
Insights:
The board of Power Finance Corporation Limited has granted in-principle approval for a merger with REC, a move that will consolidate the loan books of two major state-run entities. This decision, announced on February 6, 2026, follows a restructuring plan for the two companies introduced in the national budget by Finance Minister Nirmala Sitharaman nirmala sitharaman. The consolidation is set to create a larger state-run power financier in India 
IN, Asia's third-largest economy, significantly expanding the scale of operations in the sector.
IN, Asia's third-largest economy, significantly expanding the scale of operations in the sector.The merger brings together substantial financial resources, with the loan book of Power Finance Corporation Limited standing at 11.51 trillion rupees and that of REC at 5.82 trillion rupees. This structural change was initiated as part of the Government of India's broader efforts to reorganize its power-financing institutions. By combining these entities, the government aims to establish a more robust financial backbone for the nation's energy infrastructure.
