A PROFILE OF RURAL ELECTRIFICATION CORPORATION LIMITED 

Rural Electrification Corporation (REC) was incorporated on July 25th 1969 under the Companies Act, 1956. REC is a wholly owned Govt. of India Public Sector Enterprise with a net worth of over Rs.2,148 crore. Its main objective is to finance and promote rural electrification projects all over the country. It provides financial assistance to State Electricity Boards, State Government Departments and Rural Electric Cooperative for village electrification and energisation of pumpsets.

Background 

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 energized. 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. 

REC has been a catalyst for rural development. The Corporation has sanctioned financial assistance of Rs.28,588 crore under 37,335 rural electrification projects so far. About 3.051akh villages have been electrified through REC funded schemes. Over 78 lakh pumpsets stand energised with REC assistance. 

Mission and Objectives 

To facilitate provision of electricity in rural areas of the country of sustainable development and for enrichment of quality of life of the rural and semi-urban population by acting as a  competitive and client friendly institution for financing and promoting power generation, conservation, transmission and distribution projects in the country. 

Operating Highlights 

Village Electrification 

5.08 lakh out of the 5.87 lakh villages of the country or over 86.5% villages have been electrified upto March 200 I, 7 out of every 10 villages electrified in the country have been funded by REC. 

Pumpsets Energisation 

127.68 lakh irrigation pumpsets out of the total potential of 196 lakh Pumpsets have been energized upto March 2001. This amounts to 65.1% utilization of the ultimate potential. Thrust is on increasing production and productivity of the farm and agro-industrial sectors.  Energized pumpsets have freed Indian farmers from the gamble of monsoon and helped the country achieve self-sufficiency in food grain 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 

About 43.6 lakh single-point light connections have been released to the households 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 2001, 2,993 System Improvement projects have been sanctioned to the various states with loan outlay of Rs. 9,724 crore. 

In order to cut down commercial losses by accurate measurement of energy and power flow ill 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 new category of loan for financing procurement and installation of Energy Meters and sanctioned loan assistance of 1 ,424 crore upto March 2001. 

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. 901 crore has been sanctioned upto March 2001 to various SEBs/Power Utilities under this scheme. 

Dalit Basti 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 decentralization of rural power distribution system. These organizations intensify electrification efforts by involving local consumers. These cooperatives help conserve energy and minimize 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. 

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. 

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. 

MANAGEMENT 
REC is managed by a Board of Directors consisting of a Chairman and Managing Director and Director appointed by Central Government. 

CAPITAL 
The authorised share capital of REC is Rs.800 crore. The paid-up capital as on 31.3.2001 is Rs. 730.60 crore. 

RESOURCES 
The Corporation resource comprises Equity, Borrowing from the Government of India, Government Guaranteed SLR Bonds and Tax Free Bonds, Taxable Bonds, Reserves and Surplus.