REC targets ₹2.4 trillion loan book in renewable energy portfolio by 2030
NEW DELHI: REC Ltd, a state-owned infrastructure finance company, plans to significantly increase its loan book under the renewable energy (RE) portfolio, aiming for 2.4 lakh crore by the fiscal year 2030.
REC, a key player in energy sector project financing, has been actively contributing to India’s renewable energy goals and has taken various initiatives to accelerate RE project implementation in the country.
The company’s entry into the non-power infrastructure sector has been critical to its growth and development, with the infrastructure and logistics segment accounting for 85,735 crores in sanctions. REC has also focused on expanding its renewable business, securing a total of 21,371 crores in sanctions for this segment.
The Indian government has set an ambitious goal of installing 500 gigatonnes (GW) of renewable energy capacity by 2030. The financing initiatives and support provided by REC are critical to meeting this goal and driving the transition to clean energy sources.
REC has expanded its portfolio beyond traditional solar and wind projects by financing hybrid projects, e-vehicle projects, pumped storage projects, solar module manufacturing, and other emerging sectors such as green hydrogen, green ammonia, and round-the-clock (RTC) power projects. These initiatives demonstrate REC’s commitment to pursuing new opportunities and remaining at the forefront of renewable energy financing.
Over the years, REC’s sanction in the RE space has increased dramatically, rising from 7,034 crores in the fiscal year 2017-18 to 21,317 crore in the fiscal year 2022-23. The company’s loan book in the real estate space has also grown significantly, rising from 7,506 crore in FY 2017-18 to 29,073 crore in 2022-23.
With these encouraging trends and strategic initiatives, REC intends to increase its loan book under the Renewable Energy Portfolio to 2.4 lakh crore by the fiscal year 2030.
The recent launch of REC’s Late Payment Surcharge (LPS) scheme in June 2022 has resulted in significant reductions in outstanding dues. State utilities owed 1.39 lakh crore when it was introduced, a figure that has now been reduced to 80,000 crore. This 42% decrease in outstanding dues in a year reflects the scheme’s success in incentivizing timely payments and making the power sector an appealing investment opportunity.