Green energy to hold a third of REC's loan portfolio by 2030: CMD

REC Limited, one of leading power sector lenders under the aegis of the Ministry of Power, is looking to decarbonise its lending portfolio with more exposure to green energy sectors. The non-banking financial company (NBFC), is looking to increase the share of green energy sectors in its loan portfolio to 30 per cent by 2030, from 6.8 per cent as of now, said Vivek Kumar Dewangan, chairman and managing director, REC Ltd, said. 

REC on Wednesday reported a record high growth in its net profit during FY23. The company posted a profit of Rs 11,055 crore during the 2022-23 financial year.

REC’s management said the improvement in credit quality and reduction in non-profitable assets led to growth in profits. The company’s net worth has also growth by 13 per cent year-on-year to Rs 57,680 crore. 

The management also said its growing exposure to green energy sector, non-power sectors, such as infrastructure, logistics and irrigation aided its growth plans.

“In our loan portfolio, 39 per cent share is of conventional or fossil fuel and 6.8 per cent towards renewable energy. By 2030, we will increase our green energy share to 30 per cent. This would include the existing green energy projects and newer sectors such as green hydrogen, green ammonia. In infrastructure, we have started lending to road, metro rail, IT and health care infra projects,” Dewangan said. 

To facilitate dollar lending to new green energy sectors, especially those looking to export, REC is setting up a subsidiary in GIFT City. REC executives said the company will explore variety of global and domestic funding such green bonds, ECBs to raise money for lending to green energy sectors. 

In the power distribution sector where REC has 37 per cent exposure, it is confident that existing schemes would improve the financials and operations of state-owned power distribution companies (discoms). 

“RDSS and several provisions under it would be a game changer for the distribution sector. Our lending exposure to the distribution segment is likely to remain the same,” said Dewangan.