REC, the State-owned non-banking financial company in the power sector, said on Monday it has entered into an agreement with Germany’s KfW Development Bank for an official development assistance (ODA) term loan of $169.5 million (around ₹1,275 crore) under the Indo-German Bilateral Partnership, in accordance with the approval granted by the Finance Ministry.

The ODA loan will be deployed in part-financing power generation projects that are based on innovative solar photovoltaic technology, at competitive interest rates, the Navratna company said in a statement.

This is the fifth credit line signed between REC Limited and KfW for financing power sector projects and the third credit line for financing renewable energy (RE) projects, it added.

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In October this year, Power Minister RK Singh, while reviewing the performance of PEC and REC, had directed both the state-run NBFCs to explore cheaper options for raising funds, including offshore sources. He also asked them to focus on ensuring that the power sector value chain, particularly renewable energy, has access to cheaper funds.

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REC is continuously reshaping its policies to align with market requirements and developing financial solutions and mechanisms to channel private and public investments in the RE space. REC offers the lowest interest rates to the renewable energy sector among all the segments it finances.

KfW Development Bank has been involved in development policy and international development cooperation for more than 50 years. It works as a development institution with financing expertise and expert knowledge of development policy.

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