New Delhi (06.02.2026): In a significant step toward consolidating the power sector’s financing landscape, the Boards of Directors of Power Finance Corporation (PFC) and Rural Electrification Corporation Limited (REC)have granted in-principle approval for their proposed merger. The proposed consolidation brings together two 'Maharatna' giants— enjoying greater operational and financial autonomy- a status attained by PFC in October 2021 and REC a year later in September 2022.
The move follows the roadmap laid out in the Union Budget 2026–27, aimed at creating a high-scale, high-efficiency non-banking financial company (NBFC). The consolidation is expected to streamline lending operations for India’s energy transition and strengthen the combined entity’s balance sheet for large-scale infrastructure financing.
Union Finance Minister Nirmala Sitharaman has set a transformative roadmap for public sector NBFCs under the ‘Viksit Bharat’ framework, prioritizing aggressive credit disbursement targets and rapid technology adoption. As a cornerstone of this strategy to enhance operational scale and efficiency, the FM proposed a comprehensive restructuring of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), signaling a new era of consolidation in state-led infrastructure financing.
It may be underlined that as of December-end (2025), REC had a loan book of 5.82 trillion rupees while PFC had a loan book of 11.51 trillion rupees ($127 billion) while PFC owns a 52.63% stake in REC, which the government held before 2018. New Delhi had a 56% stake in PFC as of December-end.
Further, REC informed that details of the merger structure, integration roadmap, and implementation timelines will be shared upon completion of the approval process.
