Power Finance Corporation is awaiting government approval to raise INR 5,000 crore through an issue of tax free bonds to meet funding requirements of the power sector.

A leading lender for the power sector, PFC, expects to raise as much as INR 30,000 crore this financial year 2011-12. PFC has raised around INR 13,000 crore rupee loans so far this fiscal.

However, the finance ministry is believed to have reservations about allowing PFC and Rural Electrification Corporation to raise money through tax free bonds.

A top PFC official told PTI that "We are waiting for the notification (approving INR 5,000 crore tax free bonds issue) from the Finance Ministry. We expect to raise this amount in the current fiscal.”

The Parliamentary Standing Committee on Energy had recommended that the Finance Ministry should allow REC and PFC to issue tax-free bonds for raising funds.

(Sourced from ET)