REC will continue to be premier power sector NBFC: CMD

New Delhi: The power sector is a core sector that has been at the heart of the government's vision for an Aatmanibhar Bharat. In this conversation with PSU Watch, REC Limited's Chairman and Managing Director (CMD) Sanjeev Kumar Gupta weighs in on the reforms announced by the government, the progress made on the ground so far and the central PSU's ambitions and plans in the renewable energy segment. Here are excerpts:

The financial health of discoms is an issue that has put a lot of strain on the entire power sector. Since REC has been at the forefront of executing the government's bailout package, what are your views on how far these loans would go in addressing the issue?

Power distribution is the most crucial link in the electricity supply chain and, unfortunately, the weakest one in the country. It assumes great significance as the segment has a direct impact on the sector's commercial viability, and ultimately on the consumers who pay for power services.

Under the 'Aatmanirbhar Bharat' package, Power Finance Corporation (PFC) and REC Limited were to infuse liquidity of Rs 90,000 crore into discoms in two equal installments. These loans provide much-needed relief to DISCOMs and also improve the liquidity situation of the power sector.

What is the amount disbursed under the Rs 90,000-crore package for discoms so far? What are some of the observations drawn from the entire process?

REC has sanctioned over Rs 300 billion (~$4 billion) to discoms in the country as of July 31. Apart from benefits in purely monetary terms, this package provides relief to discoms in that their receivables from the state are taken care of. Also, the government has called for certain measures in this scheme which would help these discoms better realise their dues and states have been squarely made responsible for the affairs of discoms. So, this scheme helps the discoms, the generation and transmission companies and overall, the health of the power sector. 

India aims to reach 175 GW RE capacity by 2022. In line with this target, REC has also been expanding its RE portfolio. What are the targets that REC has set for itself? And what is the strategy going forward?

REC is determined to provide financial solutions to all types of sustainable renewable energy projects to reduce the carbon footprint. The company is looking to actively fund all emerging technologies be it solar, wind or hybrid projects. We have recently financed e-mobility projects and equipment manufacturers working in the field of solar modules, wind turbines etc. In FY 21, our loan sanctions to renewable energy projects rose by 120 percent overall.

In the future, the breakthrough is likely to come from energy storage solutions which could greatly transform the renewable space and improve its accessibility and affordability for citizens. The goal is to not just finance these projects but also work on on-ground implementation through subsidiaries and special vehicles. In the coming years, REC will maintain its pole position as the premier power sector development company in India and beyond.

The interview first appeared in a special issue published by PSU Watch on Aatamnirbhar Bharat on October 30.

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