Amid muted demand in power generation and low interest rates, Rural Electrification Corporation (REC) plans to start financing railway electrification, nuclear power capacity addition.
The state-run power finance firm is also eyeing overseas markets where it could provide technical assistance and funds in power sector and work with financial institutions.
REC also sees a huge opportunity in financing the replacement of old coal-fired thermal power plants, which would entail a total investment of Rs 1 lakh crore. This apart, the firm will tap business opportunities in distribution and transmission, feeder separation and solar pumps.
REC chairman and managing director P V Ramesh told DNA Money, "REC's strategy will focus on diversification, new clients and look at new business opportunities both in India and abroad. Power financing is a long-term enterprise. We are not in the short-term retailing like the commercial banks. Gestation of a project is several years and we lend for 20-25 tenure."
The details are being worked out with regard to diversification of investment portfolio, he added.
Ramesh said REC is best suited to fund hydropower sector which currently faces financing constraints. "There are eight projects proposed in Arunachal Pradesh and six in Jammu and Kashmir. Besides, some projects are being developed in Nepal and Bhutan."
Furthermore, REC is entering into memorandum of understanding with states to support generation capacity addition, modernisation of distribution network, inter- and intra-state transmission lines, installation of solar pumps and feeder separation.
On the fund mobilisation plan, Ramesh said the company will raise Rs 55,000 crore by the end of the current fiscal. "Of which, the RBI (Reserve Bank) has given its nod to raise $1.5 billion through external commercial borrowing (ECB). We will also issue short-duration bonds,'' he added.
According to Ramesh, sanctions will grow 20% year on year and disbursement 10%.
EXPANDING POWER
- The firm will tap business opportunities in distribution and transmission, feeder separation, solar pumps
- The details are being worked out with regard to diversification of investment portfolio, chairman said
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REC chairman and managing director P V Ramesh told DNA Money, "REC's strategy will focus on diversification, new clients and look at new business opportunities both in India and abroad. Power financing is a long-term enterprise. We are not in the short-term retailing like the commercial banks. Gestation of a project is several years and we lend for 20-25 tenure."
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