Kolkata: State-owned Power Finance Corporation (PFC) has expressed readiness to finance nuclear power projects in India, but stressed that it will move forward only once the government provides a clear policy framework, PFC Chairperson Parminder Chopra said on Thursday.

Speaking on the sidelines of the launch of the third taxable public issue of non-convertible debentures (NCDs) worth up to ₹5,000 crore, Chopra emphasized that funding nuclear projects requires careful assessment of their financial viability and revenue assurance. She noted that clarity on fuel sourcing and power offtake arrangements would be critical for PFC to proceed.

“We have to see the viability and have assurance of the revenue, including from where they are going to get the fuel and to whom they are going to supply the power,” Chopra said.

PFC is currently awaiting government guidelines before framing its internal policies for financing the nuclear sector. “Once we have some clarity on the policy front of the government, based on those guidelines we will frame internal policies also,” she added, noting that the corporation would rely on its existing appraisal mechanisms once the policy environment is clear.

The Union Budget 2025-26 outlines a significant push toward nuclear energy as part of India’s long-term energy transition strategy. The government has set an ambitious target of 100 GW of nuclear power capacity by 2047, underlining the sector’s importance in diversifying India’s energy mix and achieving carbon neutrality goals.

Improved Asset Quality and Strategic Shifts

Chopra also highlighted a sharp improvement in PFC’s asset quality. The net non-performing asset (NPA) ratio has declined to 0.37 percent, a significant recovery from the mid-2010s, when the Supreme Court’s deallocation of coal mines led to the cancellation of power purchase agreements and rendered several projects unviable.

The remaining bad loans, totaling ₹10,400 crore, are entirely from the private sector. About 80 percent of these are fully provided for, with the assets either under liquidation or undergoing resolution. The remaining ₹2,000 crore of NPA debt is under restructuring negotiations.

Chopra attributed the overall improvement in NPAs and gross Stage III assets to the resolution of two large accounts, which had previously weighed heavily on the corporation’s balance sheet.

Shift Away from Thermal Power

In line with India’s broader energy transition, PFC has significantly reduced its exposure to coal-based thermal projects. Thermal exposure has dropped from around 80 percent of the portfolio to nearly 42 percent. Incremental lending is now largely focused on power distribution and renewable energy, including hydro projects.

Currently, generation and distribution together account for about 86 percent of PFC’s portfolio, while renewables and hydro comprise around 12-13 percent. Chopra indicated that this share is expected to grow gradually as India accelerates renewable energy capacity addition.

PFC has so far supported 64 GW of renewable energy capacity, with its portfolio reaching ₹84,679 crore. The portfolio expanded at a rate of over 32 percent in the first half of FY26. Chopra, however, cautioned that while such high growth may not be sustainable as the base grows, the traction in the renewable sector is expected to continue.

Outlook and Future Plans

Chopra’s remarks underline PFC’s strategic positioning in India’s evolving energy landscape. By awaiting government policy clarity before venturing into nuclear financing, the corporation aims to ensure that investments are secure, revenue flows are predictable, and fuel supply chains are reliable.

The corporation’s shift away from coal and towards renewables, hydro, and potentially nuclear energy aligns with India’s broader objectives of achieving energy security, sustainability, and decarbonization over the next two decades.

With the government’s nuclear energy policy expected to provide the needed guidance, PFC is poised to play a crucial role in financing large-scale nuclear power projects, complementing its ongoing support for renewable energy and grid infrastructure. This strategic diversification will also help the corporation balance risk while contributing to India’s ambitious energy transition goals.

In summary, PFC’s focus on a disciplined, policy-driven approach to nuclear financing, combined with its strengthened asset base and increasing investment in renewables, positions the corporation as a key enabler of India’s clean energy transition.