REC Forms New Subsidiary for Rajasthan Power Transmission Project

16 Aug 2024 , 10:50 AM

REC Ltd has established a wholly-owned subsidiary named Rajasthan IV 4B Power Transmission Ltd to enhance the power infrastructure in Rajasthan’s Renewable Energy Zone (REZ).

The subsidiary was incorporated on August 14, 2024, under REC Power Development & Consultancy Ltd (RECPDCL), which is also a wholly-owned subsidiary of REC Ltd.

This subsidiary was formed in response to a directive from the Ministry of Power. The directive, issued via a gazette notification on June 14, 2024, designated RECPDCL as the Bid Process Coordinator (BPC) for a major transmission project.

The transmission project under this mandate aims to evacuate 3.5 GW of power from Rajasthan’s REZ Phase-IV, Part B, making it a significant development in India’s renewable energy sector.

The formation of Rajasthan IV 4B Power Transmission Ltd aligns with REC Ltd’s responsibilities under the Ministry of Power’s directive, emphasizing its role in supporting critical energy infrastructure projects.

Initially, Rajasthan IV 4B Power Transmission Ltd will remain under the ownership of REC Ltd, ensuring the parent company’s oversight during the crucial early stages of the project.

The eventual plan involves transferring ownership of the subsidiary, along with its assets and liabilities, to the successful bidder selected through the Tariff Based Competitive Bidding (TBCB) process.

The newly formed subsidiary has been established with an authorized and paid-up capital of ₹5,00,000, which will be utilized to fund its operations and developmental activities.

Rajasthan IV 4B Power Transmission Ltd’s primary objective is to facilitate the efficient evacuation of renewable energy generated in Rajasthan’s REZ, contributing to the broader national goal of strengthening India’s power transmission network.

This initiative is part of REC Ltd’s broader strategy to support the country’s transition to renewable energy by ensuring that power generated in key renewable zones is efficiently transmitted to meet the growing energy demands.

The establishment of this subsidiary follows REC Ltd’s recent financial success, where the company reported a 16% year-on-year increase in net profit for the first quarter of FY2024-25, amounting to ₹4,326 Crore.

The strong financial performance underscores REC Ltd’s growth trajectory in the power sector and its capacity to undertake and support critical infrastructure projects like the Rajasthan REZ transmission initiative.

Through the formation of Rajasthan IV 4B Power Transmission Ltd, REC Ltd continues to fulfill its mandate in the power sector, with a strategic focus on renewable energy and infrastructure development.

The company remains committed to playing a pivotal role in ensuring that renewable energy generated in critical zones like Rajasthan’s REZ is effectively transmitted to meet India’s increasing energy needs.