REC Plans to Finance 50,000 Electric Buses over the next 2-3 years

Key Highlights:
• REC Ltd tripled funding for electric buses in FY24, reaching about 10,000 buses.
• This surge reflects nationwide demand for sustainable transport.
• REC plans to finance over 50,000 electric buses in the next few years.
• They aim to increase their renewable energy portfolio to Rs 3 lakh crore by 2030.
• REC is focusing on green hydrogen and solar energy, with significant funding boosts in FY24.

In FY24, Rural Electrification Corporation (REC) Ltd nearly tripled its funding for electric buses, reaching over 10,000. The disbursal increased from Rs 2439 crore in FY23 to Rs 7124 crore. This move indicates increasing demand for electric buses among State Transport Undertakings across the country.

Beyond electric buses, REC has proposed a ten times increase in the overall renewable energy portfolio allocation to almost Rs 3 lakh crore by 2030.

At an event in Mumbai last week, Vivek Kumar Devangan, Chairman and Managing Director of the government-backed REC, said that, due to strong demand, REC intends to fund over 50,000 electric buses over the next two to three years. 

For the fiscal year ending 2023-24, REC CMD stated that financing for all green energy projects, which comprise a combination of solar, wind energy, and electric mobility, surged by 533%, from Rs 21,554 crore in FY23 to Rs 1,36,516 crore, including electric mobility and green hydrogen.

As per the company's top officials, it intends to finance the OEM's gross cost contracts (GCC model) originating from various state transport undertakings, the government of India's PM E Bus Sewa program, and private transportation operators looking to add electric buses to their diesel-powered bus fleet.

TSC Bosh, Executive Director of REC, expressed a strong preference for green hydrogen and electric mobility projects, particularly electric buses, stating that the company will 'play one of the largest roles in the country in funding bus programs' for RFPs issued by various state transport companies, as well as supporting full ecosystem support for India's electric bus mobility journey, including private players.

Bosh stated that they are committed to vigorously promoting electric mobility within both the state transport bus sector and among private tour and travel operators seeking to switch to electric vehicles. To support this initiative, they have detailed funding arrangements for 50,000 buses.

REC's green hydrogen and solar mission

REC intends to provide financial support for the production of green ammonia, which is in great demand in Western European countries including Germany, the United Kingdom, and France.

The company's solar energy funding has more than doubled, reaching Rs 20,956 crore in FY24 from Rs 9031 million in FY23. REC Ltd disbursed Rs 7997 crore for green hydrogen projects in FY24, up from nil in FY23. 

He anticipated that green hydrogen pricing, which is currently about USD 5-6, will fall to USD 1 by 2026-27, similar to solar, which cost Rs 16 per kWh a few years ago and has now been determined to cost Rs 2.5 to 3 per Kwh as more companies enter the market.

Also Read: JBM Electric Vehicles Unveils Zero-Emission Electric Buses at Bus2Bus 2024

CMV360 Says

REC Ltd's substantial increase in funding for electric buses, alongside plans to finance over 50,000 buses soon, marks a significant step towards greener and cleaner transportation in India. 

This move highlights the growing demand for electric mobility solutions and underscores REC's commitment to sustainable energy initiatives, contributing to a more environmentally friendly future.