New Delhi: State-run REC Limited will pursue investment opportunities in the thermal power space aggressively in the backdrop of the government’s renewed focus on coal-based power generation capacity expansion to meet the increasing power demand, the company’s management said at a post-earnings press conference on Thursday. “So, in terms of thermal, we have been sanctioning projects in thermal space. In recent times we have sanctioned two projects in Rajasthan and two in Delhi. We have sanctioned one project in Haryana also. We have sanctioned one project in Maharashtra… So, we are very aggressive on this particular opportunity of financing thermal generation projects,” Vijay Kumar Singh, Director (Projects), REC, said during the media interaction.
However, even as REC pursues funding opportunities in the thermal power sector, it will continue its focus on renewable energy sector as well, with plans to have RE projects comprise 30 percent of its loan book by 2030.
Currently, the share of public sector in REC’s loan book is 88 percent and private sector is 12 percent. In the backdrop of the controversy surrounding Gensol Engineering, the REC Director (Projects) said that the company is maintaining good fiscal discipline when financing RE projects. He said that two-three years down the line, REC’s private sector portfolio will rise as the company is focussed on financing RE projects and most RE developers are private entities, however, REC follows a strict due diligence process before financing projects.
On being asked if REC sees 40 GW of RE projects without Power Purchase Agreements (PPAs) as a concern while it looks to increase its RE portfolio, Singh said, “But let me just add this that since I mentioned earlier that we are financing only those projects which are tied up with PPA and not sanctioning any project where PPA is still not sanctioned. So, we do not see any risk while extending this financial assistance to the private sector.”
REC is also looking at investment opportunities in the nuclear energy sector, particularly Small Modular Reactors (SMRs), with the government’s plans to expand capacity to 100 GW by 2047. The company will be looking to fund any nuclear-powered project helmed by Public Sector Undertakings (PSUs) in the initial phase. It plans to chalk out the details of investments in the sector in the next two-three years as the government’s plan gathers steam.
