RENEWABLE ENERGY

PSU power lenders to discourage states from using Chinese equipment, tech

India has raised the pitch of its economic response against China, with New Delhi’ plan of restricting financing from state owned public sector lenders—-Power Finance Corporation (PFC), Rural Electrification Corporation (REC) and Indian Renewable Energy Development Agency (IREDA)—-to those states who don’t use equipment and technology manufactured in India, said two people aware of the development.

“Today PFC, REC and IREDA account for a majority of financing to the Indian power sector including the state discoms and electricity firms. The idea is to ensure that they don’t use Chinese equipment or technology. These financing lines may be made conditional to that,” said an Indian government official cited above.

An Indian power ministry spokesperson did not respond to queries emailed by Mint on Saturday.

The development assumes significance given that these three companies are the largest lenders to the Indian power sector and the move will discourage states from placing orders on Chinese firms. This is in addition to subsidizing finance for promoting local power equipment makers.

Also, the Union power ministry may codify sanctions in the electricity sector to discourage Chinese power equipment and technology vendors.India has raised the pitch of its economic response against China, with New Delhi’ plan of restricting financing from state owned public sector lenders—-Power Finance Corporation (PFC), Rural Electrification Corporation (REC) and Indian Renewable Energy Development Agency (IREDA

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