Aiming to retain its growth momentum for the current fiscal, P.V. Ramesh, CMD, Rural Electrification Corporation Ltd. (REC) assured that the company is witnessing robust growth in terms of profitability, sanction of projects and disbursement.
“The REC has registered 150 per cent growth in terms of sanction of projects, and we are hoping to retain the growth momentum. On the renewable front, we have witnessed six-fold growth in terms of sanctions, and 25 per cent surge in cash inflows. I can assure you that the REC is witnessing a robust growth in terms of profitability, sanctions, and disbursement,” Ramesh told , on the sidelines of a press conference conducted to release REC’s first quarter results from the current fiscal. (Q1 of FY 2017-18)
Ramesh stressed that providing power at cheaper rates, along with the availability of affordable capital, remains the priority of the Centre as well as of the REC, being the nodal agency of the Centre.
In terms of financing, Ramesh highlighted that Rs. 60,000 crore has been approved, 90 per cent of which is to be raised through the domestic market, and the rest through the international market.
“The REC is known to raise capital from the cheapest and the most competitive source. Our investors have shown a great degree of confidence in our profitability, owing to which we have raised 450 million dollars worth of green bonds with a 10-year tenure in the international markets in London and singapore stock exchanges,” he said.
Apart from the above sources, Ramesh said the REC is raising 200 million from the State Bank of India (SBI), and from international investors like the International Finance Corporation (IFC), a branch of the World Bank Group, and the KFW in Germany, to finance green energy projects.
“Our investment in renewable energy last year was Rs. 70 crore in the first quarter. This year, we have crossed Rs. 1,02,070 crore so far. We are looking to allocate 8-10 per cent of lending to renewable energy and green evacuation projects,” said Ramesh.
Lauding the Prime Minister Narendra Modi-led government for its efforts in rural electrification such as the Deen Dayal Upadhyay Gram Jyoti Yojana, Ramesh assured that the former’s vision of electrifying 18,500 villages by May 1, 2018 will be completed, adding that over 15,000 odd villages have been electrified so far.
Earlier, the REC ensured complete compliance with the norms set out by the Reserve Bank of India (RBI), while sanctioning private projects, contrary to media reports which surfaced on Thursday.
Media reports suggested that a Comptroller and Auditor General (CAG) report tabled in the Parliament on Thursday highlighted the REC’s alleged non-compliance with the RBI norms, while approving certain private projects.
Dismissing the same, the REC issued an official clarification saying the remarks mentioned in the CAG report were not pertained to the former, highlighting that the report had clearly mentioned that the REC followed the prudential norms of the RBI in recognising its Non-Performing Assets (NPA) since 2014-15, which was re-iterated by Ramesh.
In its results released earlier, the REC revealed a 16 per cent year-on-year growth in its net worth, which was capped at Rs. 34,614 crore in the first quarter of the current financial year, against Rs. 29,952 crore during the corresponding period last year.
Further, the total income for Q1 FY18 stood at Rs. 5,662 crore, with Profit before Tax at Rs. 1,890 crore, and Profit after Tax at Rs. 1,301 crore.
Also, outstanding borrowings at the end of Q1 FY18 stood at Rs. 1,68,284 crore.