Rural Electrification Corporation (REC) Ltd almost tripled its funding for electric buses to roughly 10,000 buses in FY24. The disbursal grew from Rs 2439 crore in FY23 to Rs 7124 crore, underlying strong traction for electric buses across State Transport Undertakings across the country.
Vivek Kumar Devangan, Chairman and Managing Director of government-backed REC told Autocar Professional that on the back of strong demand, he expects REC to fund over 50,000 electric buses over the next two to three years – at an event in Mumbai last week.
Beyond electric buses, REC has outlined a tenfold higher allocation towards the entire renewable energy portfolio to about Rs 3 lakh crore by 2030.
For the fiscal year ended 2023-24, REC CMD said funding for all green energy projects, which includes a mix of solar, wind energy, and electric mobility, has increased by 533%, from Rs 21,554 crore in FY23 to Rs 1,36,516 crore, including electric mobility and green hydrogen.
According to information obtained from the company’s top officials, it intends to finance the OEM’s gross cost contracts (GCC model) originating from various state transport undertakings, the government of India’s PM E Bus Sewa program, and private transport operators seeking to add electric buses to their diesel-run bus fleet.
Indicating a strong preference for green hydrogen and electric mobility projects, particularly electric buses, TSC Bosh, Executive Director of REC, said the company will ‘play one of the largest roles in the country in funding bus programs’ for RFPs issued by various state transport companies and supporting full ecosystem support for India’s electric bus mobility journey including private players.
“We have aggressive plans to promote electric mobility in both the state transport bus industry and private tour and travel operators who want to transition to electric mobility, which is why we have outlined funding plans for 50,000 buses,” Bosh also confirmed.
REC’s green hydrogen and solar mission
REC Ltd’s disbursal towards green hydrogen projects in FY24 stood at Rs 7997 crore from nil disbursements made in FY23.
The company’s funding in the solar energy space has more than doubled to Rs 20,956 crore in FY24 from Rs 9031 crore in FY23.
He predicted that prices of green hydrogen which are close to USD 5-6 are likely to come down to USD 1 by 2026-27, on the same line as solar, which was costing Rs 16 per kWh, a few years back to current discovered prices of Rs 2.5 to 3 per Kwh with more players entering the space.
REC plans to support funding for producing green ammonia, which is in high demand in Western European countries such as Germany, the United Kingdom, and France.