REC is a leading public Infrastructure Finance Company in India’s power sector. The company finances and promotes rural electrification projects across India, operating through a network of 13 Project Offices and 5 Zonal Offices, headquartered in New Delhi. The company provides loans to Central/ State Sector Power Utilities, State Electricity Boards, Rural Electric Cooperatives, NGOs and Private Power Developers.

REC is a Navratna Company functioning under the purview of the Ministry of Power – Government of India. The company is listed on both National Stock Exchange of India

National Stock Exchange of India

The National Stock Exchange is a stock exchange located at Mumbai, Maharashtra, India. It is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization...

  and Bombay Stock Exchange

Bombay Stock Exchange

The Bombay Stock Exchange is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was 1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and the 8th largest...

 .

The company is currently among the top 500 Global Financial Services brands by UK-based plc Brand Finance

Brand Finance

Brand Finance is an independent intangible asset valuation consultancy. It advises strongly branded organisations, or those with valuable intangible assets, on how to maximise their value through effective management of their brand and other intangible assets...

 (Brand Finance @ Global Banking 500 for 2010). The company is also among the Forbes Global 2000

Forbes Global 2000

The Forbes Global 2000 is an annual ranking of the top 2000 public companies in the world by Forbes magazine. The ranking is based on a mix of four metrics: sales, profit, assets and market value...

 companies for 2010.

Business Operations

REC’s business model spans across the value chain of power infrastructure financing including

(a) equipment finance,
(b) technical/ financial appraisal of project,
(c) project finance as well as short term or bridge loans for generation, intensive electrification, transmission, distribution, repair and maintenance,
(d) support functions like project monitoring, consultancy and advisory.

The company operates autonomously as a Central Public Sector Enterprise under the Ministry of Power, Government of India and also acts as nodal agency for expansive Government of India schemes for building electricity infrastructure.

Business operations in India are supported by a network of 19 offices headquartered in New Delhi.

Services Provided

The company is primarily engaged in providing finance for rural electrification projects across India and provides loans to Central/ State Sector Power Utilities, State Electricity Boards, Rural Electric Cooperatives, NGOs and Private Power Developers. The company sanctions loan as a sole lender or co-lender or in consortium with or without the status of lead financer. It also provides consultancy, project monitoring and financial/ technical appraisal support for projects, also in the role of nodal agency for Government of India schemes or projects.

Projects

REC finances all types of Power Generation projects including Thermal, Hydel, Renewable Energy, etc. without limit on size or location. The company aims to increase presence in emerging areas like decentralized distributed generation

Distributed generation

Distributed generation, also called on-site generation, dispersed generation, embedded generation, decentralized generation, decentralized energy or distributed energy, generates electricity from many small energy sources....

 (DDG) projects, and new and renewable energy sources to reach remote and difficult terrains not connected by power grid network.

In Transmission & Distribution (T&D), REC is primarily engaged in ascertaining financial requirements of power utilities in the country in the T&D sector along with appraising T&D schemes for financing. REC has financed T&D schemes for system improvement, intensive electrification, pump-set energization and APDRP Programme.
The company is also actively involved in physical as well as financial monitoring of T&D schemes.

REC also offers loan products for financing Renewable Energy projects. The company has tied up a line of credit for EUR 100 mn(approximately Rs. 6000 mn) with KfW

KFW

KFW may refer to:*Keith Fullerton Whitman , an American musician*KfW or Kreditanstalt für Wiederaufbau, a German public-sector financial institution...

 under Indo-German Development Cooperation for financing renewable energy

Renewable energy

Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...

 power projects at concessional rates of interest. Eligible projects include Solar, Wind, Small Hydro, Biomass Power, and Cogeneration Power & Hybrid Projects.

Resource Mobilization

REC raises funds through various domestic and international sources, including Commercial Banks, Capital Gain Tax Exemption Bonds, Non-Priority Sector Bonds & Commercial Paper, and Official Development Assistance loan from international agencies. International collaborations have included past tie-ups for External Commercial Borrowings with Standard Chartered Bank (London), DEPFA Investment Bank Limited (Cyprus) etc. as well as current tie-ups with KfW

KFW

KFW may refer to:*Keith Fullerton Whitman , an American musician*KfW or Kreditanstalt für Wiederaufbau, a German public-sector financial institution...

 (Germany) and Japan International Cooperation Agency

Japan International Cooperation Agency

The Japan International Cooperation Agency is an independent governmental agency that coordinates official development assistance for the government of Japan...

 (Japan) under Official Development Assistance. As an IFC, REC can also issue Infrastructure Bonds and raise funds up to USD 500 mn through External Commercial Borrowing in a year.

Domestic debt instruments of REC are assigned the highest rating “AAA” by reputed credit rating agencies CRISIL

CRISIL

Credit Rating and Information Services of India Ltd. a global analytical company providing ratings, research, and risk and policy advisory services....

, Fitch  and ICRA

ICRA

ICRA can refer to:* ICRA Limited, an Indian credit ratings agency* Indian Civil Rights Act of 1968, a United States Act regarding civil rights of American Indians/Native Americans...

. Moody’s and Fitch have rated its international credit rating at par with India’s sovereign rating.

IPO & FPO

The Company was listed on the National Stock Exchange of India

National Stock Exchange of India

The National Stock Exchange is a stock exchange located at Mumbai, Maharashtra, India. It is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization...

 and the Bombay Stock Exchange

Bombay Stock Exchange

The Bombay Stock Exchange is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was 1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and the 8th largest...

 on 12 March 2008. REC went for Initial Public Offer of 156,120,000 Equity Shares in February, 2008 which was oversubscribed by about 27 times, raising a total amount of Rs. 8.19 bn. Further Public Offer of 171,732,000 equity shares was made in February, 2010. The issue was oversubscribed by 3.14 times, raising a total of Rs. 26.47 bn.

Time-line

1969	Incorporated as a Company under the Companies Act, 1956
1992	Notified as a "Public Financial Institution"
1998	“Non-banking Financial Company (NBFC)” status by RBI
2002	“Mini Ratna Grade-I” Status
2008	“Navratna” Status, IPO of shares and partial divestment
2010	“Infrastructure Finance Company (IFC)” status by RBI, FPO of shares with 33.2% being public held

Early Years

REC was set up in July 1969, in the backdrop of a critical draught situation facing India in the late sixties. The company’s initial mandate was mainly to help State Electricity Boards energize pump-sets across the country to boost agriculture and overcome the crippling impact of three successive years of deficient monsoons. The company also provided finance to accelerate the pace of rural electrification in the overall context of planned programs 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-Liberalized India (1990s)

Liberalization by the Government of India (GoI) in 1991 saw introduction of amendments to existing laws and reform measures enabling the private sector to participate in large-scale in manufacturing industry, services industry and infrastructure. Sectors like power, airports, seaports, roadways, projects were identified for private participation, and nodal agencies were set up to do the initial spade work and later hand over such projects to private players through competitive bidding routes. In April 2006, GoI identified 14 transmission projects worth Rs 20,000 crore 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 T&D equipment.

2000-Current

Till 2000, REC focused on the Transmission and Distribution aspect of power, with projects for household electrification in rural and semi-urban areas, area electrification in tribal/ dalit areas, intensive electrification, and system improvement projects based on strengthening and improving transmission, sub transmission and distribution systems.
REC’s portfolio of Generation projects constituted mainly Mini/Micro Generation Projects up to 25MW capacity till 2000. In June 2002, the mandate of REC was expanded to include financing of all generation projects without limit on size or location. Today, financing of Generation projects has become a major thrust-area of operations for REC, also attracting majority of its private sector borrowers.

REC has systematically diversified into new and emerging areas of potential in the power business, and is today a major player in India’s power financing business with robust presence in all three functional areas of the power sector: generation, transmission and distribution. In coming years, REC plans to invest heavily on financing of New and Renewable Energy, Decentralized Distributed Generation (DDG) and modernization of T&D systems for optimization of reliable power supply to remote/ difficult rural and urban areas including hill, desert, tribal, riverine areas etc.

Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)

Since 2005, REC has been appointed nodal agency by Ministry of Power http://www.powermin.nic.in/ for Government of India scheme Rajiv Gandhi Grameen Vidyutikaran Yojana aimed at building rural electricity infrastructure and household electrification towards the National Common Minimum Programme goal of access to electricity for all. Under the scheme, 90% capital subsidy is provided by Government of India for overall cost of projects. Cumulatively till FY10, works in 190,858 villages have been completed and free connections to over 10 million below poverty line (BPL) households have been released.

Central Institute for Rural Electrification (CIRE)

In 1979, REC established a national training institute in Hyderabad for the development of techno-managerial skill and efficiency in State Electricity Boards (SEBs), Distribution Companies, Rural Electric Cooperatives and other Power Utilities, and also to conduct in-house training programs for REC’s employees. CIRE also served as a platform for association with other institutions towards a common goal of Rural Electrification (RE) and rural energy development.

Today, CIRE conducts regular programs on various aspects of Transmission and Distribution for national and international executives in the power sector, including seminars participated by both private and public utilities. Programs focus on adoption of innovative and cost effective modern technologies, training in both conventional and non-conventional energy areas and practical demonstrations via an in-house Energy Park.

Subsidiaries

REC has set up wholly owned subsidiaries viz. REC Transmission Projects Company Limited (RECTPCL) and REC Distribution Projects Company Limited (RECPDCL)http://www.recpdcl.in/ with a view to pursue new opportunities and challenges in the field of Transmission & Distribution, including consultancy and monitoring.

Energy Efficiency Services Limited (EESL)

EESL is a joint venture (JV) with 4 power PSUs - REC, Powergrid, NTPC, and PFC for implementing energy efficiency projects, promoting usage of energy efficient appliances, promoting the concept of Energy Service Companies (ESCOs) etc.

Indian Energy Exchange (IEX)

REC is an equity partner in Indian Energy Exchange (IEX)http://www.iexindia.com/, India’s first nationwide, automated, and online electricity trading platform (power exchange/ electricity market

Electricity market

In economic terms, electricity is a commodity capable of being bought, sold and traded. An electricity market is a system for effecting purchases, through bids to buy; sales, through offers to sell; and short-term trades, generally in the form of financial or obligation swaps. Bids and offers use...

), among other reputed investors like IDFC, Adani, Reliance Energy

Reliance Energy

Reliance Infrastructure, formerly known as Reliance Energy and prior to that as Bombay Suburban Electric Supply , Its India's largest private sector enterprise in power utility and its a company under the Reliance Anil Dhirubhai Ambani Group banner, one of India's largest conglomerates. The...

, Lanco and Tata Power

Tata Power

Tata Power is India’s oldest and largest private sector power utility with an installed generation capacity of over 2977 MW.On the 22 March 2011 it has announced partnership with Sunengy an Australian firm, to build India's first floating solar plant....

.

Recent Awards

2010	India Power Award 2010 from Council of Power Utilities
2010	India Pride Award 2010 for 'Best NBFC'
2010	DSIJ PSU Award 2010 from Dalal Street Group for 'The Best Wealth Creator'
2010	Global HR Excellence Award for 'Organizational Development & Leadership’ in Asia-Pacific HRM Congress 2010
2009	India Pride Award 2009 for 'Excellence in Rural Electrification'
2009	SCOPE Gold Trophy, '08-'09 for 'Best Managed Financial Institution'