REC India

Rural Electrification Corporation Limited
A Government Of India Enterprise

Citizen Charter

I. The Mission of Rural Electrification Corporation Limited is :

To facilitate availability of electricity for accelerated growth and for enrichment of quality of life of rural and urban population.

To act as a competitive, client friendly and development oriented organisation for financing and promoting projects covering power generation, cc power conservation, power transmission and power distribution network in the country.

II. Objectives

In furtherance of the Mission, the main objectives to be achieved by the Corporation are:

To promote and finance projects aimed at integrated system improvement, power generation, promotion of decentralised and non-conventional energy sources, energy conservation, renovation and maintenance, power distribution with focus on pumpset energisation, implementation of Rajiv Gandhi Gramin Vidyutikaran Yojana, other Govt. of India schemes, on agreed terms, for rural electricity infrastructure and household electrification etc.

To expand and diversify into other related areas and activities like financing of decentralised power generation projects, use of new and renewable energy sources, consultancy services, transmission, sub-transmission and distribution systems, renovation, maintenance and modernisation etc. for optimization of reliability of power supply to rural and urban areas including remote, hill, desert, tribal, reverine and other difficult/remote areas.

To mobilise funds from different sources including raising of funds from domestic and international agencies and sanction loans to the State Electricity Boards, Power utilities, State Governments, Rural Electric Cooperatives, Non-Government Oragnisations (NGOs) and private power developers.

To optimise the rate of economic and financial returns for its operations while fulfilling the corporate goals viz. (i) laying of power infrastructure; (ii) power load development; (iii) rapid socio-economic development of rural and urban areas, and (iv) technology up-gradation.

To ensure client satisfaction and safeguard customers interests through mutual trust and self respect within the organisation as well as with business partners by effecting continuous improvement in operations and providing the requisite services.

To assist State Electricity Boards/Power Utilities/State Governments, Rural Electric Cooperatives and other loanees by providing technical guidance, consultancy services and training facilities for formulation of economically/ financially viable schemes for accelerating the growth of rural and urban India.

III. The major Customers/Clients of the Corporation are given below to whom the Corporation is committed to serve :

  • State Electricity Boards
  • State Governments
  • Central/ State Power utilities
  • Independent Power producers (IPP)
  • Rural Electric Cooperatives
  • Private Sector investors

Viable projects received from the above mentioned clients in the specified areas would be eligible for financing subject to terms and conditions issued by the Corporation from time to time.

IV. Financing services offered by the Corporation to its clients:

The Corporation offers financial assistance to its clients for following categories of rural electrification works:

A.Transmission & Distribution Schemes:

i. P:IE(Intensive Electrification)

The loan assistance under these projects is provided for intensive electrification of already electrified villages (since electrification of new villages has been covered under the Rajiv Gandhi Grameen Vidyutikaran Yojana) aimed at developing electrical load to help enrich rural and urban economy.

ii. SPA:PE(Special Project Agriculture: Pumpset Energisation)

These are Special Projects aimed at supplementing agricultural production through energisation of pumpsets.

iii. P:SI (System Improvement)

These projects cover System Improvement works such as erection of new power sub-stations, augmentation of existing power sub-station, augmentation of existing sub-transmission and distribution lines for improving the quality of supply and reduction in incidental line losses which provide opportunity to pump this conserved power into distribution and earn additional revenue.

iv. SI (Meters/Transformers/Conductors)

Under this category of project, the client can seek loan assistance for bulk purchase of major materials such as meters, transformers, conductors and capacitors etc.

Normal Time Schedule for providing the above services (T&D)

Information about terms and conditions of finances, rate of interest etc. can be obtained from our Zonal/Project Offices located in various State Capitals and major cities. Each Zonal/ Project Office is suitably manned to appraise and monitor projects and is headed by a Zonal Manager/Chief Project Manager. Location of such offices is annexed with the Charter.

Normally the projects are first received in the Zonal/Project Offices and are examined/ appraised and processed before they are forwarded with their recommendations to the Corporate Office.

The projects are further processed at Corporate Office and put up to the Competent Authority for sanction. After the project is sanctioned, the approval is conveyed by the Corporate Office to the Zonal / Project Office, which further conveys the sanction along with the terms and conditions of the loan assistance to the client.

Thereafter, it becomes obligatory on the client to convey the acceptance in writing and execute the legal documents with the ZM/ CPM along-with acceptable security and payment security mechanism. Broadly the time taken for the major activities from submission of the project to the approval of sanction of loan are as indicated below:

Examination/ Processing at Project Office
Processing/ Examination at Corporate Office
Examination by Inhouse Committee/ Financial concurrence/ Screening Committee
Sanction by CMD
T&D Schemes 1 month 1 month 15 days 5 days or next BOD meeting in case where B.O.D approval is required

The time taken for conveying sanction from the Corporate Office to Zonal/ Project Office and then to the client is about 10 days.

After receipt of the complete legal documents (including security and payment mechanism) the documents are examined and signed by the ZM/CPM within one week and the claim recommended to the Corporate Office for releasing the advance amount, wherever eligible.

In case of subsequent installments (excluding Short Term Loan and loans for purchase of material) claims are required to be preferred based on the physical progress in the field reported by the client. It takes about 2 weeks to release the money after the Project Office receives the claim. In case of final installment, the Project Office may sometimes need verification from the field which may take 4 to 6 weeks in recommending a claim.

The above broad time schedule is based on the assumption that all the project reports and related documents are submitted by the client complete in all respects as desired by REC.

B. Short Term Loan

The Corporation extends Short Term Loans for procurement of materials and equipments meant for electrification, T&D works, Power Generation, Power Distribution and adoption of Information and Technology in distribution system etc.

C. Generation Projects

REC provides funds to SEBs/State Power Utilities/Private Sector for generation projects like hydro, thermal (coal and gas based), R&M, non-conventional, decentralized distributed generation etc. without any limit based on the size of the project or geographical area in the country. REC is also taking up the job of lead financier/debt arranger for the power projects.

  • Appraisal system of Generation Project
    • For Generation Projects, the loan applications, in our prescribed format for Govt./Public sector/SEB and private IPPs are, at present, being submitted to the Corporate Office which includes the checklist of essential documents to be submitted for appraisal and sanction of loan assistance. The applications along with essential documents are also accepted at the Zonal/ Project Offices, who in turn forward the complete documents to the Corporate Office.
    • On receipt of the application in the Generation wing, a preliminary scrutiny or a prima facie study is done to check availability of essential documents. Once the complete set of documents is available, the appraisal process begins. A non-refundable processing fee up to limit of 0.1% of the project cost, subject to a ceiling of Rs.20.00 lakh is generally charged from the private sector borrowers.
    • The projects are appraised and screened through a two tier committee system.
    • The projects are either sanctioned by the screening committee or the CMD or put up to the BOD, depending upon the amount of the loan sought for. All projects in private sector go to the BOD for approval of loan assistance.
    • The sanction is then conveyed to the ZM/ CPM in case of govt. sector who issues the sanction letter to the borrowing organization. The Corporate Office issues the sanction letters in case of private IPPs directly.
    • Although major projects take time depending on the merit and status of documentation, yet it is the endeavor of REC to sanction projects in approx.120 days from the date of receipt of complete information.
    • The ZM/CPM take the necessary steps for loan documentation of the projects as per terms and condition stipulated in the sanction letter. Loan documentation in case of private sector projects is done by corporate office.
    • Once the documents are executed, loan is disbursed as per terms and conditions of the sanction letter.
    • Monitoring of the scheme is carried out by ZOs/ POs. as well as Corporate Office.

D. Rajiv Gandhi Grameen Vidyutikaran Yojana(RGGVY)

Government of India launched the Rajiv Gandhi Grameen Vidyutikaran Yojana – Scheme for Rural Electricity Infrastructure & Household Electrification in April, 2005 with the objective of providing access to electricity to all households and improving rural electricity infrastructure.

The scheme covers the entire country. REC is the nodal agency for the implementation of RGGVY.



Scheme aims at providing access to electricity to all rural households in five years

Ninety per cent capital subsidy is provided for overall cost of the projects under the scheme.

States to make adequate arrangements for supply of electricity without any discrimination in the hours of supply between rural and urban households.

For projects to be eligible for capital subsidy under the scheme, prior commitment of the States have been obtained before sanction of projects under the scheme for: -

deployment of franchisees for the management of rural distribution in projects financed under the scheme, and

the provision of requisite revenue subsidies to the State Utilities as required under the Electricity Act, 2003.


Under the scheme, projects are financed with capital subsidy for provision of: –

Rural Electricity Distribution Backbone (REDB)

Provision of 33/11 KV (or 66/11 KV) sub-stations of adequate capacity and lines in blocks where these do not exist.

Creation of Village Electrification Infrastructure (VEI)

Electrification of un-electrified villages.

Electrification of un-electrified habitations.

Provision of distribution transformers of appropriate capacity in electrified villages / habitation(s).

Decentralised Distributed Generation (DDG) and Supply

Decentralised generation-cum-distribution from conventional sources for villages where grid connectivity is either not feasible or not cost effective

Remote villages covered for financing under MNES not included

REDB, VEI and DDG would also cater to the requirement of agriculture and other activities including

irrigation pumpsets

small and medium industries

khadi and village industries

cold chains


education and IT

This would facilitate overall rural development, employment generation and poverty alleviation.

Rural Household Electrification of Below Poverty Line Households:

Electrification of un-electrified Below Poverty Line (BPL) households are financed with 100% capital subsidy as per norms of Kutir Jyoti Programme in all rural habitations.

Households above poverty line will have to pay for their connections at prescribed connection charges and no subsidy is available for this purpose.


In the management of rural distribution, franchisees would be deployed who may be Non-Governmental Organisations (NGOs), Users Association, Cooperatives or individual entrepreneurs.

The Panchayati Raj Institutions would have a supervisory / advisory role in management of rural distribution through franchisees. The State Government could also encourage the Panchayati Raj institutions to take on responsibility of franchisee as and when such institutions have developed to the extent that they can undertake contractual obligations, raise resources from market and can discharge associated legal responsibilities

The franchisees arrangement may be for system beyond and including feeders from substation or from and including Distribution Transformer(s).

Based on the consumer mix and the prevailing consumer tariff and likely load, the Bulk Supply Tariff (BST) for the franchisee would be determined after ensuring commercial viability of the franchisee.

This Bulk Supply Tariff would be fully factored into the submissions of the State Utilities to the State Electricity Regulatory Commissions (SERCs) for their revenue requirements and tariff determination.

The State Government under the Electricity Act is required to provide the requisite revenue subsidies to the State Utilities if it would like tariff for any category of consumers to be lower than that of the tariff determined by the SERC.


REC has concluded MOUs with CPSUs of power sector and POWERGRID, NHPC, NTPC & DVC are providing their services to the states in implementation of rural electrification projects


Upto 1 per cent of the total subsidy under the scheme would be used for associated works / efforts of the programme linked to research, technology development, capacity building, information system development, awareness and other administrative and associated expenses and undertaking of pilot studies and projects complimentary to this rural electrification scheme.


The existing “Accelerated Electrification of one lakh Villages and one crore Households” and the Minimum Needs Programme (MNP) for rural electrification is merged in to the scheme of RGGVY.


For effective and expeditious implementation of projects under RGGVY scheme, a comprehensive framework, consisting of the following documents, has been put in place after discussions with all the concerned states, union territories, state power utilities and CPSUs :

  1. Memorandum of Understanding (MOU) with CPSUs
  2. Agreement(s) amongst REC, State Government, State Power Utility and the concerned CPSU (if involved)
  3. Guidelines for project formulation
  4. Guidelines for procurement of goods and services
  5. Amendments to REC specifications and standards
  6. Guidelines for establishment of franchisees
  7. The states are required to establish District Electricity Committees and notify rural areas in the state in accordance with the relevant provisions under the Electricity Act 2003.
  8. The states are also required to obtain the necessary certificate from the concerned Gram Panchayat regarding electrification of villages as per applicable norms.


The detailed project reports (DPRs) formulated by the concerned project sponsoring authority (StateGovt.), in accordance with the guidelines for project formulation under RGGVY issued by REC, are submitted at the concerned /Zonal Project Office of REC for the state. The DPRs are then scrutinized and appraised by the Zonal Project Office and forwarded to the Corporate office with their recommendations for consideration of sanction. The eligible projects after clearance by the Screening Committee of REC and approval of the Competent Authority, are place to the Monitoring Committee on RGGVY headed by the Secretary (Power), Govt. of India for final sanction. The approval is then communicated by REC to the concerned Zonal Project Office of REC, which issues the sanction letter to the project sponsoring authority (State Govt.)


The funds (capital subsidy @90% and loan @10%) for eligible projects under the scheme are released by REC in accordance with the relevant agreement concluded amongst the concerned parties and the concerned sanction letter of the project issued by REC.

For expeditious implementation of the projects under RGGVY scheme, the concerned State Govt. authorises REC to release directly to the implementing agency on their behalf, to meet the expenditure to be incurred for construction of project(s) and the entire sum released by REC to the implementing agency is deemed to have been drawn by the concerned State Govt.

In the event projects are not implemented satisfactorily in accordance with the stipulated conditions of the scheme, the capital subsidy could be converted into interest bearing loans.

V. The Responsibilities of the client(s):

Broadly the following initiatives / responsibilities are expected to be shouldered by the borrower for availing smooth financial services from the Corporation:

  • Preparation of detailed project report, submission of processing fee(wherever applicable) and furnishing of loan application in REC's format along with essential documents as per checklist.
  • Providing of additional information on priority as and when required for early sanction of the project.
  • Early communication of the acceptance of the sanction.
  • Fulfillment of all pre-commitment conditions.
  • Loan documentation at the earliest as prescribed including security creation.
  • Fulfillment of all pre-disbursement and other conditions.
  • Submitting the project execution schedule and draw down schedule for funds (wherever applicable).
  • Submission of claims as per the terms and conditions of the sanction letter with necessary supporting documents.
  • Execution of work as per schedule.
  • Timely payment of interest and repayment of principal as per terms and condition of sanction letter.
  • Submission of progress reports regularly as prescribed.
  • Cooperation with all agencies involved in sanction, monitoring and evaluation of the project at all stage.

VI. The Organization undertakes to meet its obligation to its bondholders, debenture holders and other lenders.

VII. The Corporation has signed a Memorandum Of Understanding with the Government. It is committed to achieve the mutually agreed MOU targets.

VIII. The Corporation has constituted a Grievance Redressal Committee headed by Chief Vigilance Officer at Corporate Office to look after public grievances.