AP Govt Backs ₹500 Crore Loan for State Power Sector

The Andhra Pradesh government has stepped in to help the Andhra Pradesh Power Finance Corporation Limited (APPFCL) secure a ₹500 crore loan from Punjab & Sind Bank. Through an official order issued by the state energy department, the government has provided a full financial guarantee to the bank's Hyderabad branch, paving the way for the corporation to access the funds immediately.
This ₹500 crore will be channeled directly into the state's power network. The money will be lent to state utilities that produce electricity, manage major transmission grids, and run local distribution lines, helping ensure smooth operations, uninterrupted power supply, and better upkeep of electrical infrastructure across towns and villages.
Under the terms set by the government, the state guarantee covers both the principal loan and interest for the entire repayment period. However, the loan is not a direct government payout-APPFCL must repay the debt using its own operational revenues, and the state will only step in if the corporation defaults. As part of the agreement, APPFCL will also pay a 0.5 percent commission to the state finance department for providing the guarantee.