REC signs 200 million Euro loan agreement with the German bank KfW – EQ
In Short : The Rural Electrification Corporation (REC) has signed a loan agreement of 200 million Euros with the German bank KfW. This financial arrangement likely involves funding for renewable energy or rural electrification projects, fostering collaboration between Indian and German institutions to advance sustainable development initiatives.
In Detail : Gurugram, 8 December 2023: REC Limited, a Maharatna CPSE under the Ministry of Power, signed a 200 million Euro loan agreement with the German bank KfW on Friday. This marks REC’s sixth line of credit under the Indo-German Development Cooperation and demonstrates the commitment to enhance the distribution infrastructure of DISCOMs in line with the Revamped Distribution Sector Scheme (RDSS) of the Government of India (GoI).
The signing event was graced by the presence of key dignitaries, including Mr. Wolf Muth, Country Director (India); Ms. Carolin Gassner, Director (South Asia); and Dr. Juergen Welschof, Head of the Division from KfW along with the officials from the German Embassy. Mr. T.S.C. Bosh, ED (BDM, I&L) along with Smt. Valli Natarajan, ED(SOP) and Mr. Saurabh Rastogi, CGM (BDM) attended the event on behalf of REC Ltd.
This occasion marks a significant step in REC’s ongoing commitment to reform the distribution sector in the country. REC is the nodal agency to implement the RDSS scheme. The government launched the Revamped Distribution Sector Scheme RDSS) to help DISCOMs improve their operational efficiencies and financial sustainability by providing result linked financial assistance to DISCOMs to strengthen supply infrastructure based on meeting pre-qualifying criterial and achieving basis minimum benchmarks.
“This announcement not only showcases REC’s ability to secure strategic partnerships with international financial institutions but also underscores our integral role in driving positive change within the power distribution landscape in India. The collaboration with KfW is expected to have a transformative impact on the operational capabilities and financial resilience of DISCOMs, ultimately contributing to the broader goals of the RDSS scheme and the nation’s power sector reforms,” said Mr. Bosh.
REC Limited, a Maharatna CPSE established in 1969, under Ministry of Power, provides long term loans and other finance products for Power-Infrastructure sector comprising of Generation, Transmission, Distribution, Renewable Energy and new technologies like Electric Vehicles, Battery Storage, Green Hydrogen etc. More recently REC has also diversified into the Non-Power Infrastructure sector comprising of Roads & Expressways, Metro Rail, Airports, IT Communication, Social & Commercial Infrastructure (Educational Institution, Hospitals), Ports and Electro-Mechanical (E&M) works in respect of various other sectors like Steel, Refinery, etc. The loan book of REC exceeds Rs 4,74,275 Crore.
