Rural Electrification Corporation Provides $2 Billion Loan to MAHAGENCO to Develop Thermal and Renewable Energy Projects
The Rural Electrification Corporation (REC), a public sector unit of the Government of India involved in financing all segments of power sector, has provided a ₹130 billion (~$2 billion) loan to Maharashtra State Power Generation Co. Ltd. (MAHAGENCO) for generation projects, flue gas desulfurization (FGD) systems, STP, working capital and special loan requirements.
A MAHAGENCO official said, “The funds will be utilized to get the best out of each sector – solar, wind, and thermal. There are new technologies coming up and the funds will help MAHAGENCO develop the best facilities and projects.”
An official at REC commented, “They [MAHGENCO] can utilize the funds to set up any sort of power project, be it thermal or renewable. The motive of REC is to see that electricity reaches to the masses and we provide funds to states.”
When asked about financing renewable energy projects, the REC official added, “The plan is to make more projects viable by easy financing; we want to beat last year numbers, where REC financed 16 renewable energy projects in total.”
The REC is one of the major financers of renewable energy projects in India. During the financial year (FY) 2016-17, REC approved a loan totaling ₹20.9 billion (~$326 million) to develop 11 grid-connected solar projects aggregating 280 MW, four small hydro power projects aggregating 61 MW, and a 26 MW wind energy project.
The MAHAGENCO has recently been tendering solar projects across the state of Maharashtra. In June, MAHAGENCO invited an expression of interest from developers, engineering procurement construction contractors, and investors to develop a 500 MW solar park in Dondaicha and 1,500 MW of solar for agriculture feeders across the state. In July, it tendered 150 MW and in August another 110 MW of solar.
MAHAGENCO has been looking at solar as part of its solution to provide cheap electricity to farmers across the state. These funds may ensure the success of the solar program being undertaken by MAHAGENCO in Maharashtra.
Image credit: REC India
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.