We are focusing on financing more power projects
Rural Electrification Corporation of India Limited (RECL) is a navratna company under the ministry of power, which finances power projects across the country.india Updated: Sep 19, 2011 00:27 IST
Rural Electrification Corporation of India Limited (RECL) is a navratna company under the ministry of power, which finances power projects across the country.
The 42-year-old company is known for setting benchmarks in financing and promoting power generation, transmission and distribution projects in both public and private sectors. RECL is also a registered non-banking finance company with the status of infrastructure finance company (IFC). Its chairman and managing director HD Khunteta spoke to HT. Excerpts:
What are the highlights of RECL’s first quarter results (Q1) and what is outlook for the
During Q1, total income increased by 23% from R1,929 crore to R2,373 crore and profit before tax increased by 13% from R793 crore to R896 crore. The Profit After Tax (PAT) increased to R662 crore from R587 crore in the previous year. The annualised yield on loan was 11.04% during the quarter as against 11.11% in the previous year. For the current financial year, the company expects to sanction new projects for over R65,000 crore and has the disbursement target of R28,000 crore. The firm expects to increase its loan book from R81,725 crore at the end of March, 2011 to R1,05,000 crore at the end of March 31, 2012, showing a growth of about 25% during the year.
What role do you see for RECL in overall rural development?
As a navratna public sector undertaking engaged in core infrastructure sector—power—and as a nodal agency for Rajiv Gandhi Grameen Vidyutikaran Yojana programme, RECL expects to play a major role especially in power sector giving a big push for rural development.
How does the rural market look like in these times of monetary tightening from the RBI? What are your fund raising plans in the current fiscal?
Our total requirement for the market borrowing for the year 2011-12 is about Rs 28,000-30,000 crore and out of this at the end of August 2011, we have raised over Rs s12,500 crore from the domestic and international markets. The company follows a judicious mix of raising resources from the various sources — both from domestic market and abroad. Last year, we raised about $1.17 billion (about Rs 5,265 crore) from the international markets Despite monetary tightening we expect no problem in meeting our market borrowings programme for the current financial year.
How much are you expanding in green power areas such as solar?
We are focusing on expanding the business of financing power projects to include projects having backward and forward linkages to power projects. The government’s thrust on the renewable energy sector, and several policy initiatives on this front including the mandatory renewable energy purchase obligations imposed on the distribution companies are creating favourable climate for the sector. During the financial year 2010-11, six solar projects were sanctioned for a total project cost of Rs 621.06 crore and loan assistance of Rs 390.71 crore.
First Published: Sep 19, 2011 00:25 IST