Rural Electrification Corporation Board Approves Seven Renewable Energy SPVs

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  • These seven special purpose vehicles (SPVs) will be used for evacuating renewable energy
  • In the context of raising capital, a SPV can be used as a funding structure, by which all investors are pooled together into a single entity

Rural Electrification Corporation’s (REC) board members have approved the creation of seven SPVs. These SPVs will be used to evacuate (transmit) renewable energy from the states of Rajasthan, Madhya Pradesh, Karnataka and Maharasthra.

“The Board of Directors of REC in its meeting held on 25 March 2020 has approved the proposal for incorporation of seven projects specific special purpose vehicles (SPVs) as wholly-owned subsidiaries of REC Transmission Projects Company (RECTPCL),” read the official statement.

The companies to be incorporated will be wholly-owned subsidiary companies of REC. RECTPCL auctions these transmission projects in India. The incorporated entities are then handed over to successful bidders for development and operation. India’s power ministry allocates the transmission projects.

Seven transmission projects included

The seven transmission projects include transmission system for evacuation of power from RE projects in Osmanabad area (one GW) in Maharashtra; transmission system for evacuation of power from RE projects in Rajgarh (2,500 MW) SEZ in Madhya Pradesh; transmission scheme for Solar Energy Zone in Gadag (2,500 MW), Karnataka.

The other projects include transmission scheme for solar energy zone in Bidar (2,500 MW), Karnataka; transmission system strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase-II Part A; transmission system strengthening for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase-II Part B; and transmission system strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase-II Part C.

In the context of raising capital, a SPV can be used as a funding structure, by which all investors are pooled together into a single entity. A SPV is a legal entity generally created for a specific purpose.

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