Cabinet gives 'In Principle' approval to PFC takeover of REC

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given its 'In Principle' approval for strategic sale of the Centre's existing 52.63 per cent of total paid up equity shareholding in Rural Electrification Corporation (REC) to Power Finance Corporation (PFC) along with transfer of management control. The acquisition intends to achieve integration across the power chain, obtain better synergies, create economies of scale and have enhanced capability to support energy access and energy efficiency by improved capability to finance power sector. It may also allow for cheaper fund raising with increase in bargaining power for the combined entity. Both REC and PFC are Central Public Sector Enterprises under the Ministry of Power.