Attractively Valued

Rural Electrification Corporation (REC) is a public sector enterprise whose main objective is to finance projects in the power sector. These projects could be aimed at improving the overall integration of the system, adding generation capacity, promoting decentralised and non-conventional sources of energy, energy conservation, and maintenance and distribution. It is also responsible for the implementation of the Rajiv Gandhi Gramin Vidyuttikaran Yojna (which is a scheme of the government of India for electrification of rural areas). The company has five subsidiaries: REC Transmission Projects Company Ltd., REC Power Distribution Company Ltd., North Karanpura Transmission Company Ltd., Talcher II Transmission Company Ltd., and Raichur Sholapur Transmission Company Ltd. Sectoral outlook Huge fund requirement. During the first three years of the XIth five-year plan, the country’s generation capacity increased from 132.3 gigawatts (GW) in FY07 to 159.4 GW in FY10, an addition of 27,068 megawatt (MW). The government is targeting capacity addition of 78,700 MW during the XIth five-year plan. A report issued by the central government’s working group on power for the XIth plan estimates that the power sector will require Rs 10,31,600 crore of funds during the current plan period. For the XII plan period, the Central Electricity Authority (CEA) estimates that in order to meet projected demand by 2017, capacity addition of 1,00,000 MW will have to be undertaken. Including the funds required for expanding transmission and distribution systems, the total fund requirement for this plan period is estimated at about Rs 11,00,000 crore. Concerns. In recent times, the financial health of state electricity boards (SEBs) has deteriorated. The Prime Minister’s Office (PMO) has appointed a high-level committee to review the finan