Relief for Rajasthan Discoms: Centre's Lending Agencies PFC and REC Slash Interest Rates

Power distribution corporations in Rajasthan have received significant relief following a reduction in loan interest rates by the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).  

This move comes after a meeting between Chief Minister Bhajan Lal Sharma and Union Power Minister Manohar Lal Khattar in New Delhi. 

Interest Rate Reductions for Rajasthan Discoms 

The PFC and REC have lowered interest rates on loans, providing much-needed relief to the discoms of Jaipur, Jodhpur, and Ajmer. The interest rate cuts are expected to reduce the debt burden of these corporations, which collectively owe around ₹98,000 crore. Previously, they faced interest payments exceeding ₹7,800 crore in FY26 up until January. 

PFC has approved a special interest rate of 9.60% for Jaipur discom on long-term capital loans, a reduction of up to 1.40% from rates that were previously above 11%. For Jodhpur and Ajmer discoms, the rate has been set at 10.50%. 

REC's Contribution to Interest Rate Relief 

REC has also offered a special interest rate of 9.60% for the three discoms on medium-term loans, similarly reducing rates by up to 1.40%. Additionally, REC has extended concessions to Jaipur discom on capital loans, bringing the interest rate down to 9.60% from over 11%. 

Read More: Power Finance Declared Borrowing Plan for FY27: Rewarded Shareholders With ₹3.25 Dividend Per Share! 

Impact on Short-Term Financing 

Both PFC and REC have reduced interest rates on short-term financing by 0.90%, now available at an interest rate of 8.85%. This reduction is expected to have a positive impact on the balance sheets of the discoms, allowing them to allocate more funds towards the expansion and strengthening of power infrastructure. 

Conclusion 

The reduction in loan interest rates by PFC and REC provides significant financial relief to Rajasthan's discoms. This move is anticipated to ease their debt burden and enable better allocation of resources towards improving power infrastructure in the region. 

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