New Delhi: In a major push to India’s infrastructure development, state-owned REC Ltd has announced its ambitious plan to increase its financial sanctioning in the roads and highways sector to INR 1 lakh crore in the current financial year. This strategic move marks a substantial rise from the previous year’s sanctioning of INR 85,000 crore.
The announcement was made by Chairman and Managing Director Vivek Kumar Dewangan, who outlined the company’s broader vision of expanding its portfolio, not just in the traditional power sector, but also in the burgeoning logistics and renewable energy sectors. “In the current year, we are expecting total sanctions in the non-power and logistics sector to surpass INR 1 lakh crore, a considerable increase from last year’s INR 85,000 crore,” Dewangan said.
In line with the national focus on renewable energy, REC also aims to scale up its portfolio in this sector. The company has set a target to enhance its renewable energy portfolio tenfold, aiming to reach INR 3 lakh crore by 2030, up from the current INR 30,000 crore. Dewangan said, “Our renewable energy portfolio will witness a tenfold increase to INR 3 lakh crore, and our asset under management is expected to grow to INR 10 lakh crore.”
During the 2022-23 financial year, REC’s sanctioning to the logistics sector was over INR 85,000 crore, a significant part of its total sanction of INR 2.68 lakh crore. “Last year, about 32% of our total sanctions were directed towards non-power ventures in logistics,” the chairman and managing director informed.
The company’s asset under management has seen robust growth in the current financial year, reaching INR 2.75 lakh crore in the first half, showcasing a growth rate of 20%, a marked improvement over the previous year’s 13%.
Highlighting the need for robust financing mechanisms in the road and highway sector, especially in Public-Private Partnership (PPP) mode, Dewangan emphasized the critical role of private sector funding. He referred to the ministry of road transport and highways’ (MoRTH) ambitious targets, including the bidding of BOT projects worth INR 2 lakh crore by March 2024 and the Bharatmala Phase-1 project, whose cost has escalated to INR 11 lakh crore, necessitating significant private sector funding.
Earlier in the day, REC Limited hosted a conference on ‘Financing for Roads and Highways’ in New Delhi, which was attended by key stakeholders from the government, industry, and financial sectors. The conference saw the signing of four MoUs worth INR 16,000 crore with major companies like Dilip Buildcon Limited, GMR Power & Urban Infra, CDS Infra Projects Limited, and DP Jain & Co. Infrastructure Pvt. Ltd.
The conference, which was opened by Chairman and Managing Director Vivek Kumar Dewangan, provided a platform for an in-depth discussion on the financing aspects of the road sector.
Addressing the participants, Anurag Jain, IAS, Secretary (RT&H) MoRTH urged MoRTH’s vision for the development of the sector & ease of financing road projects. He talked about India’s roads and highways journey and said the quality of roads has improved significantly from the last few years. Along with this, he hoped that REC Limited and MoRTH would grow together.
The conference featured presentations from REC and the Road and Highways agencies, highlighting their unique perspectives on financing challenges and opportunities within the sector. It provided an opportunity for the presentation of both lenders’ and borrowers’ perspectives, followed by an open forum discussion, in which queries of Road and Highway developers were addressed.
