Electronic states of PrCoO$_3$ are studied using x-ray photoemission spectroscopy. Pr 3d$_{5/2}$ core level and valence band (VB) were recorded using Mg K$_beta$ source. The core level spectrum shows that the 3d$_{5/2}$ level is split into two components of multiplicity 4 and 2, respectively due to coupling of the spin states of the hole in 3d$_{5/2}$ with Pr 4f holes spin state. The observed splitting is 4.5 eV. The VB spectrum is interpreted using density of states (DOS) calculations under LDA and LDA+U. It is noted that LDA is not sufficient to explain the observed VB spectrum. Inclusion of on-site Coulomb correlation for Co 3d electrons in LDA+U calculations gives DOS which is useful in qualitative explanation of the ground state. However, it is necessary to include interactions between Pr 4f electrons to get better agreement with experimental VB spectrum. It is seen that the VB consists of Pr 4f, Co 3d and O 2p states. Pr 4f, Co 3d and O 2p bands are highly mixed indicating strong hybridization of these three states. The band near the Fermi level has about equal contributions from Pr 4f and O 2p states with somewhat smaller contribution from Co 3d states. Thus in the Zaanen, Sawatzky, and Allen scheme PrCoO$_3$ can be considered as charge transfer insulator. The charge transfer energy $Delta$ can be obtained using LDA DOS calculations and the Coulomb-exchange energy U from LDA+U. The explicit values for PrCoO$_3$ are $Delta$ = 3.9 eV and U = 5.5 eV; the crystal field splitting and 3d bandwidth of Co ions are also found to be 2.8 and 1.8 eV, respectively.
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