IREDA Secures ₹9,501 Crore Loan from PFC and REC for Power Projects

Answer: B

Statement 1 is correct: PFC is indeed a 'Maharatna' company under the Ministry of Power, playing a crucial role in financing the power sector. Statement 2 is incorrect: While REC finances power generation and transmission, its primary focus, as indicated by its name, has historically been on rural electrification and related infrastructure, though its mandate has expanded to cover the entire power sector, including urban areas and renewable energy. The statement 'primarily focuses on urban areas' is incorrect. Statement 3 is correct: IREDA is a 'Mini Ratna Category-I' PSU under the Ministry of New and Renewable Energy, dedicated to promoting, developing, and extending financial assistance for renewable energy and energy efficiency projects.

Answer: C

Statement 1 is correct: India has pledged to achieve 500 GW of non-fossil energy capacity by 2030, a commitment made at COP26. Statement 2 is incorrect: While large-scale solar and wind projects are significant, these institutions also finance a diverse range of renewable energy projects including small hydro, biomass, waste-to-energy, and energy efficiency projects, not exclusively large-scale solar and wind. Statement 3 is correct: Green bonds are a crucial and growing financial instrument globally for raising capital specifically for environmentally friendly projects, including renewable energy, and India is actively promoting their use to meet its climate finance needs.

Answer: A

Assertion (A) is true: PSUs like PFC, REC, and IREDA are indeed vital for India's energy security and infrastructure development, especially in the power sector, by providing crucial financial support and expertise. Reason (R) is true: A key characteristic of many PSUs, particularly in infrastructure and strategic sectors, is their developmental mandate. They often step in to finance projects that are capital-intensive, have long gestation periods, and may not offer immediate high returns, thereby filling a critical gap that private sector entities, driven primarily by profit motives, might avoid. This developmental role directly explains why they are critical for national energy security and infrastructure development. Therefore, R is the correct explanation of A.