To 'green up' portfolio, REC to sign Rs 2 trn pacts with 20 renewable firms

MoUs part of ongoing deliberations for energy transition under India's G20 Presidency

REC, one of the biggest lenders to India’s power sector, is planning to sign memoranda of understanding (MoUs) worth Rs 2 trillion with close to 20 renewable energy companies (both public and private sector) to fund their energy transition projects.

These include solar, wind power, green hydrogen, decarbonisation, and battery storage, among others.

The MoUs are part of the ongoing deliberations for the energy transition under India’s G20 presidency. The fourth and last Energy Transition Working Group meeting is underway in Goa. Sources in the know said the MoU fund pool would include Indian and global companies that have a presence in the country.

“The interest rate of green energy projects is already lower than the thermal portfolio of REC. The idea is to close the financing gaps for large-scale projects, especially in emerging technologies,” a senior executive in the know said.

Sources said the move was also aimed at “greening up” the company’s portfolio. REC spokesperson has declined to comment. The state-owned company has traditionally been the leading financier of conventional power projects and the power distribution sector.

It also runs several government-sponsored schemes, which involve grants and loans to the state energy and electricity departments. In recent times, the company has been trying to diversify its loan portfolio.

In May, Vivek Kumar Dewangan, chairman and managing director of REC Ltd, said the company was also looking to increase the share of green energy sectors in its loan portfolio to 30 per cent by 2030, from 6.8 per cent currently.

Sources also indicated the company is looking at offshore borrowing and routing low-cost climate and allied funds to India.

“This entails the company having a sizable amount in their portfolio that is not linked to fossil fuels,” said an executive requesting anonymity.

In May, the company said it was setting up a subsidiary in GIFT City to facilitate dollar lending to new green energy sectors, especially those looking to export. REC executives said the company would explore a variety of global and domestic funding options, such as green bonds and ECBs, to raise money for lending to green energy sectors. 

Avaada signs MoU with REC for its Rs 20K cr pipeline

Avaada Group signed an MoU with REC for its energy transition ventures, with total expected investments worth Rs 20,000 crore. The upcoming projects of Avaada include green hydrogen, solar photovoltaic manufacturing, and solar, wind, and hybrid projects. Vineet Mittal, chairman of Avaada Group, said: “This collaboration symbolises a monumental stride towards India’s energy self-sufficiency. It exemplifies our staunch commitment to nurturing a sustainable future and propelling India's green energy transition.” REC did not comment.