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REC With Punjab National Bank To Lend Up To ₹55,000 Crore To Power, Infra Projects


In a significant development for the Indian power and infrastructure sectors, state-run REC Ltd. has entered into a Memorandum of Understanding (MoU) with Punjab National Bank (PNB) to explore collaborative opportunities for funding projects in these sectors under a consortium arrangement. This partnership aims to co-finance loans amounting to a substantial ₹55,000 crore over the next three years, according to an official statement released by REC.

Ministry of Power’s Approval

While expressing confidence in REC, the Ministry of Power has granted the company permission to diversify its lending portfolio beyond the power sector. This decision aligns with the ministry’s commitment to contribute to the accelerated development of our nation. Notably, REC can now finance up to 33% of its outstanding loan book in the power sector.

REC’s Remarkable Progress in the Infrastructure Sector

During the first year itself, REC has sanctioned more than ₹85,700 crore towards various projects spanning from metro, ports, airports, oil refineries, highways, steel infrastructure to healthcare, educational institutions, and IT infrastructure/fiber optics, among others. These constitute about 32% of the overall sanctions of the company in the last financial year.

REC’s Dual Focus: Power and Non-Power Infrastructure

REC has traditionally provided long-term loans and other financial products for the power-infrastructure sector, encompassing generation, transmission, distribution, renewable energy, and emerging technologies such as electric vehicles, battery storage, and green hydrogen. However, it has recently diversified into the non-power infrastructure sector, expanding its loan book to above ₹4.54 trillion.

Green Initiatives: REC’s Commitment to Renewable Energy

In line with India’s energy transition journey, REC is committed to increasing its focus on green projects. The NBFC has ambitious plans to expand its loan portfolio for green projects to ₹3 trillion by 2030. CMD Dewangan stated, “REC will be known for its renewable energy initiatives, encompassing solar, wind, hybrid, and e-mobility projects, as well as emerging spaces like green hydrogen, green ammonia projects, round-the-clock projects, and ethanol manufacturing. REC is committed to increasing its present loan portfolio of green projects to the extent of more than ten times by the year 2030, amounting to ₹3 lakh crore.

International Financing: REC’s Recent Fundraising Efforts

Notably, in April, REC successfully raised $1.15 billion in loans. These loans come with a 5-year tenor and are benchmarked to the Overnight Secured Overnight Financing Rate (SOFR), which serves as the benchmark rate for loans denominated in USD. The proceeds from this facility will also be utilized to fund power, infrastructure, and logistics sector projects, in line with the guidelines of the Reserve Bank of India regarding External Commercial Borrowings (ECB).


The collaboration between REC Ltd. and Punjab National Bank signifies a significant step forward in facilitating the financing of power and infrastructure projects in India. With REC’s expanding portfolio and commitment to green initiatives, the partnership is poised to contribute to the nation’s growth and development in these crucial sectors.

Key takeaways for competitive examination

  • Chairman and Managing Director (CMD) of REC: Mr. Vivek Kumar Dewangan
  • Minister of Power, New & Renewable Energy: Shri R.K. Singh

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