REC to Drive India’s Transition to Net Zero as a Development Financial Institution

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REC Limited, a public infrastructure finance company under the Ministry of Power, is being considered to be given the status of a development financial institution (DFI) to steer global climate funding and strengthen net-zero investment in India.

REC has been classified as a non-banking financial company (NBFC) so far. NBFCs generally provide financial services similar to banks. But as a development financial institution, it will be supported by the Government of India to provide development or project finance, emphasizing long-term financing rather than collateral-based financing.

Recently, REC Chairman and Managing Director Vivek Kumar Dewangan said India would require an estimated $3.5 trillion for a net-zero economy by 2050 and $10 trillion by 2070. A large part of the investments would be required in the country’s power sector. REC’s vision is to diversify into energy transition and future technology funding.

As a development financing institution, REC will analyze end-to-end capital flow requirements and bridge the gap through large-scale fund mobilization and monitoring.


With strong domain expertise and appraisal capabilities, REC is strategically placed to discharge the duties and responsibilities of a DFI. The company’s business operations include financing projects in the complete power sector value chain for various projects, including generation, transmission, distribution, and renewable energy.

REC, a non-banking financial company, provides financial assistance to state electricity boards, state governments, central/state power utilities, independent power producers, rural electric cooperatives, and private sector utilities.

Last October, REC Limited raised its first ever five-year secured overnight financing rate- linked syndicated term loan of $75 million. REC also entered into an interest rate swap referencing SOFR to hedge the interest rate risk on this facility. The company said that the proceeds from this facility would be utilized to fund infrastructure projects in the power sector.

REC has also raised $1.175 billion from a consortium of seven banks to fund infrastructure power projects permitted by the Reserve Bank of India. The fund raised is the single largest syndicated loan in the international bank loan market for any Indian NBFC.

REC reported a total income of ₹392.30 billion (~$5.05 billion) for the financial year (FY) 2022, an 11% increase compared to ₹354.10 billion (~$4.56 billion) in FY 2021. The company’s net profit in FY22 recorded a 20% YoY growth to ₹100.46 billion (~$1.3 billion), the highest ever for the company.