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REC to complete $-denominated bond offer by March, hike funding for renewables

V Rishi Kumar | | Updated on: Jan 29, 2018
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‘1,200 villages have been electrified and the rest will be covered by March’

 

The Rural Electrification Corporation Limited is set to complete the fund raising programme of the $ 1.5 billion dollar-denomiated bonds offer before March 2018.

“The funds thus raised, with a shorter tenure of about 3 years, will be redeployed to refinance high cost debt,” PV Ramesh, Chairman and Managing Director of REC, said.

Speaking on the sidelines of launching an innovation platform for renewables at the T-Hub, the REC CMD said, “RBI has permitted REC to raise up to $1.5 billion. We are working towards closing this fund before March 2018.”

Asked about any moves to further divest government stake in REC, the CMD said, “The government has announced its plan to raise funds by divesting its stake in public sector undertakings. We will have to wait and see how this move pans out. It is not appropriate to comment on this now.”

Fifth largest

“Set up 50 years ago, we have become the sixth largest PSU and fifth largest in terms of profitability. Currently, our annual disbursement rate is about ₹80,000 crore and we continue to fund both fossil fuel fired power plants and renewable energy sector. The latter is about 1.2 per cent of the overall funding last year.”

“However, we are looking at increasing the funding for the renewable energy sector to about 4-5 per cent of the overall portfolio,” he said.

Referring to the government push towards 100 per cent electrification, Ramesh said, “All but 1,200 villages of 6 lakh villages have been electrified and the rest also will be covered by March 2018, two months ahead of the plan to achieve 100 per cent electrification. Likewise, the proposal to connect all the 4.2 crore households with an outlay of ₹18,000 crore will also be achieved by December 2018.”

“On an average, about one lakh households are being electrified per day and 1.5 lakh households in Uttar Pradesh.

This will ensure we achieve the Prime Minister Narendra Modi’s target of electrifying all households by December this year,” he said. Referring to the current installed capacity of about 3.3 lakh MW, Ramesh said, “These are running at total plant load factor of about 60 to 65 per cent. The peak demand during summer of 2017 was at 1.7 lakh MW. However, this shot up to 1.95 lakh MW by December 2017. While the average demand was projected to grow by about 10 per cent, the actual demand growth was about 6.8 to 7 per cent. But the demand growth may go up as the economy grows at a faster rate,” he explained.

The demand growth may not actually reflect exactly the ground situation as number of measures taken for energy conservation have also played a big part in overall consumption.

This includes 80 crore LED bulbs being replaced and a number of energy efficient items being implemented, he felt.

Published on February 01, 2018

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