REC, German Dev Bank to Finance India’s Power Sector and RE Projects

REC Limited has entered into an agreement with KfW Development Bank for availing the Official development assistance (ODA) loan of USD 169.5 million under the Indo-German Bilateral Partnership in accordance with the approval granted by the Department of Economic Affairs, the Ministry of Finance, the Government of India, an official release said.

The proceeds from the ODA loan will be deployed for the part financing of innovative solar PV technology-based generation projects in India at competitive interest rates, the release added.

This is the fifth credit line signed between REC ltd and KfW for the financing of power sector projects and third credit line for the financing of renewable energy projects.

Last month, Germany, Europe’s largest economy and powerhouse, announced new development commitments of over Euro 1.3 billion (approximately Rs 10,025 crore) to India. The funds will be used for assisting India in its measures to push back against climate change and related areas such as adding more renewable energy, Germany said.

According to Professor Claudia Warning, Director General from the German Ministry for Economic Cooperation and Development, the Indo-German cooperation rests on four key mega-trends: climate change, urbanisation, degradation of natural resources and pressure on democracy and society.

“REC ltd is continuously re-shaping its policies to align with market requirements and developing financial solutions and mechanisms that create scalable and effective ways of channelizing both Private and Public investments in the Renewable Energy space. As a testament to this, REC offers the lowest interest rates to renewable energy sector among all the segments being financed by the corporation,” the Ministry of Finance said.

REC Limited (formerly Rural Electrification Corporation Limited) is a Navratna company under the administrative control of the Ministry of Power (MoP). A public Infrastructure Finance Company in India’s power sector, it finances and promotes power projects across the country.