Nuclear, Thermal, Green Corridors On REC Radar In Bid To Double AUM To Rs 10 Lakh Crore By 2030

REC Ltd., formerly known as Rural Electrification Corp., plans to go big on financing nuclear power, green energy corridors, and conventional thermal power projects as the public sector power project-financer aims to double its assets under management to Rs 10 lakh crore by 2030.

India's power requirement is expected to grow four-fold by 2030 and ten-fold by 2047 and is likely to be led by renewable energy, nuclear and conventional power, according to the company's Chairman and Managing Director Vivek Kumar Dewangan.

The company is actively financing wind, solar power, wind turbine manufacturing, green hydrogen, ammonia, and other related projects and sees opportunity in small and modular nuclear reactors since government targets to have a 100-gigawatt nuclear capacity by 2047.

“If we include nuclear then we expect our total renewable assets under management to increase to Rs 3.5 lakh crore by 2030. We consider nuclear under green category,” Dewangan said.

REC's renewable energy portfolio alone is expected to be around 3 lakh crore by 2030, he added.

REC's total loan book has grown from Rs 3.8 lakh crore in 2022 to Rs 5.65 lakh crore by 2024-end, with a projected 15% growth in assets under management per annum the company expects this to double by 2030 to Rs 10 lakh crore.

The company has signed memorandum of understandings worth Rs 3.98 lakh crore last year and have already sanctioned around Rs 1.9 lakh crore, indicating a substantial increase in investments in the coming years, he said.

The conventional power sector also holds significant potential, with an optimal generation mix requiring 80-90 GW in the next 6-8 years. Ultra-super critical plants and green energy corridors will drive this growth, Dewangan said.

The evacuation of renewable energy will require investments in green energy corridors. The revamped distribution scheme, expected to be completed next year, will also require additional investment, he said.

Dewangan highlighted that its stressed assets are in the final stages of resolution, with 7 assets heading for liquidation. The resolution of stressed assets are expected to yield Rs 2,500-3,000 crore, while the assets under liquidation have been 100% provisioned for.

“The corporation is taking measures to ensure that new renewable energy projects do not turn into non-performing assets,” he said.

REC is also hopeful that with the improvement in financial conditions of discoms under the Revamped Distribution Sector Scheme, they are likely to invest more in reducing the gap between their average cost of supply and the average revenue realised. Along with the ACS-ARR gap, the discoms are also expected to cut aggregate transmission and commercial losses as they will go for the installation of smart meters.