Rural Electrification Corporation Limited

Early years

REC was established in July 1969, amidst a critical drought situation in the late sixties. The company’s initial mandate was helping State Electricity Boards energise pump-sets across the country to boost agriculture and mitigate the impact of three successive years of deficient monsoons. The company also financed rural electrification, supporting planned programmes for increased agricultural production. Besides finance, REC also offered appraising, consultancy, technical support and monitoring of projects, to assist State Electricity Boards/Power Utilities, Rural Electric Cooperatives and other such institutions.

Post-Liberalised India (1990s)

Liberalisation by the Government of India (GoI) in 1991 saw amendment to existing laws and reform measures enabling the private sector to participate in large-scale manufacturing, services and infrastructure. Sectors like power, airports, seaports, roadways, projects were identified for private participation, and nodal agencies were set up for initial spade work, later handing over projects to private players through competitive bidding. In April 2006, GoI identified 14 transmission projects worth ₹ 200 billion for development by 2012. REC was identified as one of the two GoI-appointed nodal agencies for transferring identified projects to private developers. REC also started extending loans to manufacturers of transmission and distribution equipment.

2000–Current

Till 2000, REC focused on the transmission and distribution, with projects for household electrification in rural and semi-urban areas, area electrification in tribal/Dalit areas, intensive electrification, and system improvement. REC's portfolio constituted mainly Mini/Micro generation projects up to 25MW capacity till 2000. In June 2002, the REC's mandate was expanded to financing all generation projects without limit on size or location. Today, financing of generation projects has become a growing focus for REC, also attracting its private sector borrowers.

Since 2005, REC has been appointed nodal agency by Ministry of Power for Government of India scheme Rajiv Gandhi Grameen Vidyutikaran Yojana. The scheme built rural electricity infrastructure and electrified households, supporting the National Common Minimum Programme goal of universal access to electricity. Under the scheme, a 90% capital subsidy is provided by Government of India for overall project cost. Cumulatively till FY10, works in 190,858 villages were completed with free connections to over 10 million impoverished households. The REC is the nodal agency under the SAUBHAGYA Yojana.

Business operations

REC is the 12th Maharatna Company functioning under the purview of the Ministry of Power. The company is listed on both the National Stock Exchange and the Bombay Stock Exchange. Business operations in India are supported by 22 regional offices, with corporate headquarters at Gurugram and a registered office in New Delhi.

Services

The company primarily provides finance for rural electrification projects across India, loaning to Central/ State Sector Power Utilities, State Electricity Boards, Rural Electric Cooperatives, NGOs, and Private Power Developers. The company may be a non-primary financier of loans. It provides consultancy, project monitoring, and financial/technical appraisal, acting as a nodal agency for public schemes or projects. It audits financial requirements of transmission and distribution (T&D) utilities, and appraises T&D scheme financing. REC has financed system improvement, intensive electrification, pump-set energisation, and the APDRP Programme.

The company also physically and financially monitors T&D schemes.

REC offers loans for renewable energy projects. The company has allocated a €100M (approximately ₹ 6000M) credit line with KfW under Indo-German Development Cooperation to finance renewable energy projects at concessional interest rates. Eligible projects include solar, wind, small hydro, biomass, and cogeneration/hybrid projects.