REC Limited, a Maharatna power finance company, is eyeing a renewable energy loan portfolio of up to Rs 2.4 lakh crore ($30 billion) by 2030, its Chairman and Managing Director (CMD) Vivek Kumar Dewangan told Moneycontrol.
Talking about REC's role in the government of India’s target of having a total installed capacity of 500 gigawatt (GW) by 2030, Dewangan said the public sector undertaking (PSU) plans to increase its green financing share to about 30 percent of the total loan portfolio, up from the current 6 percent.
"REC is going to play a very crucial role in financing India's green projects. As of today, our total loan portfolio is about Rs 4,11,000 crore ($51.4 billion). Of this, currently about Rs 25,000 crore ($3.1 billion) is for financing green projects," he said.
"Now, we are taking a very ambitious plan for financing green projects in the next five to seven years. Right now our share of renewable energy financing is about 6 percent of our total loan portfolio, but gradually we are going to increase it to about 25 to 30 percent and our loan portfolio in renewable energy sphere will go beyond Rs 1 lakh crore (based on the current loan portfolio)," Dewangan said.
He, however, said that by 2030, REC Ltd's total loan portfolio will also increase to Rs 7-8 lakh crore (about $100 billion) from the current Rs 4.11 lakh crore ($ 51.4 billion). "Take 30 percent of our total loan portfolio by 2030. So, REC Ltd's loan portfolio in only the renewable energy sector will then be up to Rs 2.4 lakh crore ($ 30 billion) by 2030. That is what we are targeting," he told Moneycontrol.
Financing pumped storage, green hydrogen, green ammonia projects
At present, REC is financing primarily solar, wind and hybrid projects. Going forward, the company will finance pumped hydro storage, green hydrogen and green ammonia projects, Dewangan added.
For the coming financial year (2023-24), Dewangan said REC is looking at financing up to Rs 50,000 crore worth of green projects. "We are also targeting some pumped storage, green hydrogen, and green ammonia projects, along with solar, wind and hybrid projects from the coming financial year onwards," he said.
When asked about the impact of COVID-19 and supply chain issues on green energy projects, Dewangan said financing in this sector saw a considerable increase in the past two years. "Actually, the progress that we have achieved through solar and wind will give impetus to green hydrogen. Production of green hydrogen depends on the production of energy through solar and wind only, which is an impetus to green hydrogen efforts," he said.
More projects to be handed over soon
Dewangan stated that REC Power Development Corporation Limited (REC PDCL), a subsidiary of NBFC REC Ltd, will handover 16-18 projects in the next six-eight months.
"Our subsidiary REC PDCIL has completed handing over 50 transmission projects. This was a golden jubilee celebration for transferring 50 project-specific Special Purpose Vehicles (SPVs) by REC PDCL. Now another 16 to 18 projects are lined up where the projects are at different stages of bidding process. In the next six to eight months, we'll be able to conclude all these 16 to 18 projects also," he said.
On March 30, REC PDCL handed over the project-specific SPV for the Khavda II-A Transmission construction to Adani Transmission (ATL), making it the 51st transmission project to be successfully handed over to the winning bidder. The total cost of these 51 projects is Rs 69,872 crore.
REC PDCL is a bid process coordinator for transmission projects which are built through tariff-based competitive bidding process. On March 22, REC PDCL, handed over six SPVs to Power Grid Corporation of India Ltd (PGCIL).
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