PFC-REC Merger to Boost Renewable Energy Funding, Says CreditSights

• Proposed merger of PFC and REC expected to improve financing access for India’s renewable energy developers.
• Merger will particularly benefit large and complex renewable projects, previously challenging to fund individually.
• Combined entity to have stronger capital base, enabling larger underwriting capacity and competitive refinancing.
• RBI's single counterparty lending limits (30% of Tier 1 capital) currently restrict individual funding for large projects.
• Merger could also enhance financing for transmission grid capex, improving grid connectivity for renewables.