REC has announced plans to increase its investment in the entire renewable energy portfolio to approximately Rs 3 lakh crore by 2030, a tenfold increase from its current allocation, extending beyond just electric buses.
In the fiscal year 2023-24, the Rural Electrification Corporation (REC) Ltd significantly expanded its financial support for electric buses, nearly tripling its funding to approximately 10,000 buses. The allocation surged from Rs 2,439 crore in FY23 to Rs 7,124 crore, indicating robust interest in electric buses among State Transport Undertakings throughout India.
Vivek Kumar Devangan, the Chairman and Managing Director of the government-backed REC, conveyed that due to strong market demand, he anticipates REC will provide financing for over 50,000 electric buses in the next two to three years. This statement was made during an event in Mumbai last week. Additionally, REC has announced plans to increase its investment in the broader renewable energy sector by tenfold, aiming for about Rs 3 lakh crore by 2030.
For the fiscal year that concluded in 2024, the REC CMD reported a 533% increase in funding for all renewable energy initiatives, which includes solar and wind energy, electric mobility, and green hydrogen projects, from Rs 21,554 crore in FY23 to Rs 1,36,516 crore.
Further information from the company’s senior executives indicates that REC plans to finance the Original Equipment Manufacturer’s (OEM) gross cost contracts (GCC model) emanating from various state transport undertakings, the Government of India’s PM E Bus Sewa program, and private transport operators looking to replace their diesel bus fleets with electric ones.
TSC Bosh, Executive Director of REC, emphasized the company’s commitment to significantly support green hydrogen and electric mobility projects, particularly electric buses. He stated that REC is poised to be a major player in funding bus programs through RFPs issued by various state transport companies and providing comprehensive ecosystem support for India’s electric bus mobility journey, including private entities.
Bosh also confirmed that they have ambitious plans to improve electric mobility in the state transport bus sector and among private tour and travel operators who are keen to transition to electric mobility. This is why they have projected plans to finance 50,000 buses.
Regarding REC’s other green initiatives, in FY24, the company allocated Rs 7,997 crore to green hydrogen projects, up from no disbursements in FY23. Funding for solar energy projects also saw a significant increase, more than doubling to Rs 20,956 crore in FY24 from Rs 9,031 crore in FY23.
The cost of green hydrogen, currently around US$ 5-6, is expected to decrease to US$ 1 by 2026-27, mirroring the price trajectory of solar energy, which has fallen from Rs 16 per kWh a few years ago to current rates of Rs 2.5 to 3 per kWh as more competitors enter the market.
REC also aims to support the production of green ammonia, which is seeing rising demand in Western European nations such as Germany, the United Kingdom, and France.
