Financing of Generation Projects by REC
- Upto May 2002, REC used to finance only Mini/Micro Generation Projects upto 25MW capacity. In June 2002, the mandate of REC was expanded to include financing of all generation projects without limit on size or location.
- REC finances all type of Power Generation Projects like Thermal, Hydel, Renewable Energy, R&M of existing projects etc.
- The borrowers of REC include State Sector Power Utilities/SEBs, Central Sector, Joint Sector and Private Sector Power Utilities.
- REC sanctions loan as a sole lender or co-lender or in consortium with or without the status of lead financer.
- As per the present policy, loans for public sector generation projects are sanctioned upto a maximum of 80% of project cost i.e. in a Debt Equity Ratio of 80:20 but upto the exposure limit fixed for the Power Utility. For Private Sector Projects, the financing by REC is limited upto 50% of the project cost or 25% of the net worth of REC, whichever is less.
- The tenure of loans for generation projects varies between 10 to 15 years with a suitable moratorium period depending upon a case-to-case basis.
- With a modest beginning in 2002-03, when projects worth Rs.736 crore were sanctioned, REC till 2008-09 has sanctioned Generation Projects worth Rs.79772 crore. The details of sanctions during the last 7 years as on 31.3.2009 are as per Annexure-1.
- REC has formed a separate division for DDG projects which looks after the sanction of loan for small hydro, biomass, wind energy, solar and co-generation power projects.
- Major Projects sanctioned so far by REC in state sector include Santaldih TPP in West Bengal, Lehra Mohabbat TPP in Punjab, Korba(East) and Korba(West)TPPs in Chhattisgarh, Vijaywada and Kakatiya TPP in Andhra Pradesh, Bhusawal and Chandrapur TPP in Maharashtra, Tehri HEP in Uttaranchal, Utran TPP in Gujarat, Durgapur Steel TPP of DVC, Baglihar HEP in J&K, Anpara-D TPP in Uttar Pradesh, Vallur and North Chennai TPP in Tamilnadu, Chhabra TPP in Rajasthan, Nabinagar Thermal Power Project in Bihar etc.
- Major promoters in private sector have also approached REC for finance. In private sector, REC has sanctioned loan for Karcham Wangtoo HEP in Himachal Pradesh, Sasan Ultra Mega Power Project, Mahan Superthermal Power Project and Maheshwar HEP in M.P., Pathadi TPP in Chhattisagrh, Wardha TPP in Maharashtra, Adani thermal Power Project in Gujarat, Teesta Stage-III and VI HEP in Sikkim etc.
- Some of the promoters have even approached REC for taking up the role of lead financier in consortium. At present, REC is acting as lead financier in 100 MW Malana-II Hydro Electric Project in H.P., the 1200 MW Teesta Phase-III Hydro Electric Project in Sikkim, the 270 MW phase-I and 270 MW Phase-II coal based thermal power project of Wardha Power Company Pvt. Ltd. in Maharashtra, the 1200 MW Anpara-C Thermal Power Project in Uttar Pradesh and the 1320 MW coal based thermal power project of Thermal PowerTech Corporation (India) Ltd. in Andhra Pradesh.
Status of Generation Projects Pending for Sanction
Sanctions Details of Generation Projects for FY 2015-16