INVC NEWS
New Delhi : REC Limited, a Maharatna Central Public Sector Enterprise (CPSE) under the Ministry of Power, continues to cement its status as a leading non-banking financial company (NBFC) in India. In the first half of FY25, REC disbursed a staggering ₹90,955 crore, registering an impressive year-on-year (YoY) growth of 20.10%. This significant achievement underscores the company’s focus on accelerating financial aid to the energy sector and further strengthens its commitment to supporting India’s power infrastructure development.
One of the most remarkable highlights of REC Limited’s performance in H1 FY25 is the extraordinary surge in renewable energy loans, which soared by 92.68% YoY to reach ₹11,297 crore. This sharp rise in green energy financing aligns with the Government of India’s push for sustainable development and demonstrates REC’s proactive approach toward fostering renewable energy projects.
Q2 FY24-25 Loan Disbursement Performance: A Snapshot
In the second quarter of FY25, REC disbursed ₹47,303 crore in loans, a 13.71% increase YoY compared to ₹41,598 crore disbursed in Q2 FY24. Within this, renewable energy loans aggregated to ₹5,946 crore, which represents an impressive 37.35% YoY increase from the ₹4,330 crore recorded in Q2 FY24. The proportion of renewable energy loans as a part of the total disbursements also grew from 10% in Q2 FY24 to 13% in Q2 FY25.
This uptick in both total and renewable energy disbursements clearly shows REC’s growing focus on clean energy financing as part of its broader lending portfolio. As India continues to move toward achieving its ambitious renewable energy targets, REC’s financial support in this domain will play a pivotal role in ensuring the seamless implementation of these green initiatives.
REC’s Continued Support for India’s Power Sector
REC Limited has been at the forefront of providing financial assistance for the development and augmentation of power infrastructure in India. Over the years, REC’s loan portfolio has evolved to cover not only traditional energy sources but also renewable and sustainable energy projects. This strategic shift reflects the government’s commitment to promoting clean energy and reducing carbon emissions in line with global environmental goals.
In the first half of FY25, REC’s total disbursements of ₹90,955 crore were channelized into various projects across the power sector, including the generation, transmission, and distribution of electricity. The 20.10% YoY growth in loan disbursements is a testament to REC’s efficient lending mechanisms and its ability to meet the evolving needs of the sector. Additionally, REC’s emphasis on financing renewable energy projects has opened up new avenues for growth, helping the company stay relevant in a rapidly transforming energy landscape.
Accelerating Renewable Energy Growth: A Strategic Focus
The surge in REC’s renewable energy loans, which grew by a whopping 92.68% YoY, marks a significant milestone in the company’s journey toward supporting a sustainable energy future for India. The increase from ₹5,864 crore in H1 FY24 to ₹11,297 crore in H1 FY25 is reflective of REC’s focus on scaling up its green lending portfolio.
This growth is driven by the rising demand for financing solar, wind, and other renewable energy projects across the country, as India seeks to transition to a low-carbon economy. With the renewable energy sector playing a crucial role in India’s energy security, REC’s increased disbursement of green loans will likely facilitate the construction and operationalization of large-scale renewable energy projects.
In Q2 FY25 alone, renewable energy loans accounted for ₹5,946 crore, representing 13% of total disbursements for the quarter, up from 10% in the corresponding period last year. This reflects the increasing proportion of green projects within REC’s overall lending framework, signifying the company’s long-term commitment to clean energy financing.
Key Drivers Behind REC’s Renewable Energy Financing Surge
Several factors have contributed to REC’s aggressive push toward renewable energy financing, including:
- Government Policies and Incentives: The Indian government has introduced a slew of favorable policies, subsidies, and tax incentives aimed at promoting renewable energy projects. These measures have created a conducive environment for companies like REC to step up their support for green energy initiatives.
- Rising Private Sector Participation: With private companies increasingly foraying into the renewable energy space, the demand for large-scale financing has grown. REC has responded to this demand by increasing its loan disbursements for solar, wind, and hydroelectric projects.
- Sustainability Goals and ESG Mandates: As part of its broader environmental, social, and governance (ESG) objectives, REC has strategically aligned its lending practices to promote projects that contribute to India’s sustainable development goals (SDGs). This includes expanding its portfolio of renewable energy loans, which contribute to reducing the carbon footprint of the power sector.
REC’s Role in India’s Energy Transition
India is undergoing a major energy transition, with the government setting ambitious targets for achieving 500 GW of non-fossil fuel energy capacity by 2030. REC’s growing involvement in financing renewable energy projects will be crucial in enabling the country to meet these targets.
As a leading NBFC in the power sector, REC is uniquely positioned to bridge the financing gap for clean energy projects by providing affordable loans to both public and private sector players. REC’s strategic focus on scaling up renewable energy lending is not only helping the company diversify its portfolio but also reinforcing its role as a key enabler of India’s energy transition.
Future Outlook: REC’s Vision for Green Financing
Looking ahead, REC’s focus on renewable energy financing is expected to intensify, given the government’s unwavering commitment to reducing carbon emissions and increasing the share of renewables in India’s energy mix. The company’s recent performance highlights its ability to capitalize on emerging opportunities in the renewable energy space, driven by favorable market conditions, technological advancements, and growing investor interest in green projects.
Moreover, as the energy landscape continues to evolve, REC is likely to expand its lending portfolio to include new and innovative green technologies, such as energy storage systems and green hydrogen projects. These emerging technologies will require significant capital investments, and REC’s continued support will be critical in bringing them to fruition.
REC’s Commitment to Sustainable Growth
REC Limited’s robust financial performance in H1 FY25, marked by a 20.10% YoY increase in total loan disbursements and a 92.68% YoY surge in renewable energy loans, underscores the company’s commitment to driving sustainable growth in India’s power sector. As the country continues its journey toward energy self-reliance and a greener future, REC’s role as a leading financier of renewable energy projects will become even more pivotal.
With a strong track record of financing critical infrastructure and a growing focus on clean energy, REC is well-positioned to support India’s transition to a sustainable energy future. By providing affordable and timely financing for renewable energy projects, REC is not only enhancing its own growth prospects but also contributing to the broader objective of building a cleaner, greener, and more resilient energy ecosystem in India.
