For purposes of funding, PFC classifies State Power Generation and Transmission entities into A++, A+, A, B and C categories. The categorisation (biannually) of State Power Generation and Transmission entities is arrived based on the evaluation of entity’s performance against specific parameters covering operational & financial performance including regulatory environment, availability of audited accounts, etc. as per PFC categorisation policy.

Project Special Purpose Vehicles (SPVs) in Government Sector incorporated to construct new projects are categorised keeping in view their ownership pattern, which is subject to review after availability of annual accounts after one full year of operation or 18 months after project CoD, whichever is earlier. Thereafter, the rating may be based on the financials of the Project Company or State Utilities grading methodology.

With respect to State Power Distribution entities (including Entities with integrated operations), PFC categorisation policy provides for adoption of Ministry of Power (MoP) Integrated Ratings by aligning such ratings/gradings with PFC’s standard categories of A+, A, B, C and D.

The categorisation enables PFC to determine pricing of loans and stipulation of security to the state power entities.