PFC Taps €150 Million KfW Loan to Drive Power Distribution Reforms Under RDSS – EQ
In Short : Power Finance Corporation (PFC) has signed a €150 million loan agreement with Germany’s KfW to support distribution sector reforms under the Revamped Distribution Sector Scheme (RDSS). The funding will help strengthen India’s power infrastructure, enhance efficiency, and reduce losses in electricity distribution, aligning with the government’s vision of reliable, affordable, and sustainable energy for all.
In Detail : Power Finance Corporation (PFC), the central PSU under the Ministry of Power, has signed a €150 million loan agreement with Germany’s development bank KfW. The funding will be utilized to support the government’s Revamped Distribution Sector Scheme (RDSS), which focuses on improving efficiency, reliability, and sustainability in India’s power distribution network.
The loan agreement reflects growing international cooperation in India’s energy sector reforms. With rising electricity demand, modernization of distribution networks has become critical, and support from global institutions like KfW adds strength to the country’s vision of building a robust and future-ready energy infrastructure.
Under RDSS, emphasis is placed on reducing aggregate technical and commercial losses, improving billing efficiency, and ensuring 24×7 reliable power for consumers. The scheme also integrates advanced technologies like smart meters, digital monitoring, and energy-efficient systems to streamline operations across distribution companies.
PFC, being one of the largest financiers in the power sector, plays a vital role in mobilizing resources for such transformative projects. This loan will help distribution companies implement reforms aimed at achieving financial sustainability while improving service delivery at the consumer level.
The collaboration with KfW also underlines the importance of sustainable financing in the energy sector. The focus is not only on building infrastructure but also ensuring that the reforms align with climate goals, promote renewable integration, and reduce the carbon footprint of electricity supply chains.
KfW’s support comes at a time when India is accelerating its clean energy transition and improving grid infrastructure. Strengthening distribution networks is a key part of enabling higher renewable energy penetration, ensuring that green power reaches consumers without major transmission or distribution challenges.
Officials from PFC stated that this funding will help enhance operational capabilities of DISCOMs, making them more competitive and efficient. The loan is structured to facilitate long-term reforms, with focus on outcomes like consumer satisfaction, financial health, and reliability of electricity supply.
Germany has been a long-standing partner in India’s energy sector through technical cooperation and financing support. This agreement continues the tradition of Indo-German collaboration in sustainable development, ensuring that India’s energy reforms receive global backing and expertise.
The €150 million loan marks another milestone in India’s journey towards a modern, efficient, and sustainable power distribution system. By combining domestic policy reforms with international financial support, the country is laying the foundation for an energy-secure future that is both inclusive and environmentally responsible.
