When India became independent in 1947, electricity was available in a few villages and merely touched a few towns and cities. At the time of launch of five-year development plans in 1951, about 3000 villages were provided electricity and nearly 21000 irrigation pumpsets were energised. In 1965-67, India faced a drought during which the main focus was to ensure food security by raising the food production. In order to do so, a rural electrification programme was devised for increasing the infrastructural input for agricultural production programmes. To implement the programme effectively REC was set up.
Rural Electrification Corporation (REC) is a Government of India Enterprise working under the Ministry of Power. Set up in 1969, its main objective is to finance and promote rural electrification projects all over the country. As a matter of policy, it accords priority to the development of backward areas, Dalit bastis and tribal villages. The Corporation has been playing an important role in rural India’s life by village electrification, which is a catalyst to rural development.

Village Electrification
REC has sanctioned over 36255 schemes and financed SEBs/State Governments to the tune of more than Rs. 23,518 crore. 5.07 lakh out of 5.87 lakh villages of the country or over 86.3% villages have been electrified upto September 2000. At an average, 9 out of every 10 villages have access to electricity. 13 out of 26 States of the country have achieved the goal of cent-per-cent electrification of villages.

Pumpset Energisation
125.88 lakh irrigation pumpsets out of the total potential of 196 lakh pumpsets have been energised upto September 2000. This amounts to 64.2% utilisation of the ultimate potential. Thrust is on increasing production and productivity of the farm and agro-industrial sectors. Energised pumpsets have freed Indian farmers from the gamble of monsoon and helped the country achieve self-sufficiency in foodgrain production. REC projects have helped improve quality of life in villages by increasing agricultural yield and thereby generating more income and more employment opportunities in villages.

Kutir Jyoti
More than 39.2 lakh free single-point light connections have been released to the poorest of the rural poor under Kutir Jyoti Programme meant for providing electric light to people living below the poverty line.

System Improvement
Rapid expansion of rural power distribution network has resulted in high losses, poor reliability and frequent interruptions. To address the above problems of various State Power Utilities, REC has taken lead role in providing financial assistance for bringing out much needed improvement in the T&D system, through its System Improvement Programme. System Improvement projects of the States are aimed at improving the efficiency of power system by reducing losses and improving quality of power supply. Till March 2000, 2654 System Improvement projects have been sanctioned to the various states with loan outlay of Rs. 4718 crore.

In order to cut down commercial losses by accurate measurement of energy and power flow in the electrical power system, most of the SEBs/Power utilities are taking up programmes for large-scale installation and replacement of meters. This has given rise to growing need for financing of investment in installation of new meters and replacement of old and inefficient energy meters. Recognising this, the Corporation introduced during the year 1999-2000, a Special Category of loan for financing procurement and installation of Energy Meters and sanctioned loan assistance of Rs.382 crore in that year.
Similarly, to meet the ever increasing requirement for financial support for installation and replacement of old/damaged transformers, capacitors and similar other equipment so as to improve the quality and reliability of power supply, the Corporation also introduced another scheme for financing the procurement and installation of transformers and other such equipments in the year 1999-2000. Financial assistance of Rs. 323 crore was sanctioned during the year to various SEBs/Power Utilities under this scheme.

Dalit Bastis and RE Cooperatives
REC accords high priority to the development of Dalit bastis, tribal villages and backward areas. It promotes rural electric cooperatives to encourage decentralisation of rural power distribution system. These organisations intensify electrification efforts by involving local consumers. These cooperatives help conserve energy and minimise pilferage by functioning on democratic lines. 33 RE Cooperatives are in operation in six States through loan assistance of over Rs.115.39 crore from REC.

JBIC Loan
REC has mobilised funds from Japan Bank for International Cooperation (JBIC), formerly known as OECF, to the tune of 24 billion yen (Rs.750 crore) under which 45 System Improvement and one small hydro-electric projects are being implemented in 7 States of Andhra Pradesh, Haryana, Karnataka, Kerala, Orissa, West Bengal and Tamil Nadu on turnkey basis through International competitive bidding. Twenty-four System Improvement projects have already been completed and remaining twenty-one System Improvement and one small hydro projects are under advance stage of completion.

CIRE
The Central Institute for Rural Electrification (CIRE) established by REC at Hyderabad in 1979 provides training in Energy Management and Rural Electrification. It caters to the training needs of public and power utilities, RE cooperatives, banks, development agencies associated with rural energy programmes and REC itself. CIRE has conducted more than 564 programmes and trained over 11030 participants. REC provides training in renewable energy systems. It has an energy park in its premises set up through MNES assistance.

Achievements
REC registered spectacular performance in all fields of its operations during the year ended 31st March 2000. The Corporation has earned profit of Rs 425 crore marking around 9% increase over the highest ever profit of Rs 391 crore during the year 1998-99. The highest ever recovery of Rs 2715 crore is another highlight of REC’s performance during the year 1999-2000. This is about 19% more than the previous year’s recovery of Rs 2276 crore which was a record. The Corporation disbursed Rs 3051 crore during the year ended 31st March 2000.
For the seventh year in succession the Corporation has once again qualified for ‘Excellent’ grading of its performance against the MoU parameters. The Corporation was recently awarded a Certificate of Merit by Hon’ble Prime Minister of India for excellence in the achievement of MoU targets for the year 1998-99. Not only this, the Corporation contributed to the exchequer by way of taxes, dividend etc. a sum of Rs 175.44 crore. Another sum of Rs.760.22 crore was paid by way of repayments of loans taken from the Government in the past taking the total contribution to the exchequer to Rs.935.66 crore. Against this, the Corporation borrowed only Rs.789.83 crore from the Government and has thus made a net contribution of Rs.145.83 crore to the exchequer.

New Areas
REC has diversified to promote small power generation schemes upto 25 MW station capacity in the non-conventional and renewable energy sectors. This programme is open to the private sector also. It has so far sanctioned financial assistance amounting to nearly Rs 268 crore for implementation of 22 small hydro, diesel and wind power generation projects. This will create additional generation capacity of nearly 66.49 MW to cater to the needs of rural sector. In order to harness solar power, more than 8000 photo-voltaic panels have been installed in rural areas for community and street lighting through financial assistance from REC and the collaborating Central and State agencies.

REC successfully raised over Rs 980 crore worth bonds from the market upto September 2000. CARE and DCR have assigned REC, AAA(SO) rating for private sector bonds, which indicates Corporation’s credibility and investors confidence. Apart, the bonds proposed to be raised by the Corporation during the current year has been given the highest rating of AAA by CRISIL.