Why in News?                                                                                                        

REC Limited, a Maharatna Central Public Sector Enterprise under the Ministry of Power and a leading NBFC, has received a ‘No Objection Certificate’ (dated May 3, 2024) from the Reserve Bank of India, for setting up a wholly owned subsidiary in International Financial Services Centre (IFSC), Gujarat International Finance Tec-City (“GIFT”), Gandhinagar, Gujarat.


What is REC?

  • REC Limited (formerly Rural Electrification Corporation Limited) is a Central Public Sector Undertaking under the Ministry of Power involved in financing projects in the complete power sector value chain from generation to distribution.
  • It is registered with the RBI as a Non-Banking Finance Company (NBFC), a Public Financial Institution (PFI) and an Infrastructure Financing Company (IFC).
  • It was incorporated in 1969, in the backdrop of severe drought and famine in the country, to energize agricultural pump-sets for irrigation purposes, thereby reducing the dependency of agriculture on monsoons.
  • REC has evolved and expanded its financing mandate to cover the entire Power-Infrastructure sector, comprising 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 Roads & Expressways, Metro Rail, Airports, IT Communication, Social and Commercial Infrastructure (Educational Institution, Hospitals), Ports and Electro-Mechanical (E&M) works in respect of various other sectors like Steel, Refinery, etc.
  • Financing: REC provides long-term loans and other financing products to State, Centre, and Private Companies for creation of infrastructure assets in the country.
  • REC funds its business with market borrowings of various maturities, including bonds and term loans, apart from foreign borrowings.
  • RECPDCL (REC Power Development and Consultancy Limited), the wholly owned subsidiary of REC, provides a range of value-added consultancy services in the power sector.