REC Ltd Inks Initial Deals Worth USD 6 Billion to Establish Ammonia and Green Hydrogen Projects
Indian state-owned financier REC has entered into initial agreements amounting to 500bn Indian rupees (equivalent to $6bn) to establish green hydrogen and ammonia initiatives. This announcement was shared by REC's Chairman and Managing Director, Vivek Kumar Dewangan.
A significant move by REC in the green hydrogen and ammonia sector was seen in July when they extended a Rs40bn loan to Acme, an Indian renewable developer, for a project in Oman. Additionally, REC and Acme are in preliminary talks regarding another loan, which could potentially fund green ammonia ventures in the Indian regions of Odisha and Tamil Nadu.
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State-operated refineries, namely HPCL, IOC, BPCL, and MRPL, have approached REC with financing requests for green hydrogen projects. Dewangan mentioned India's consideration to implement mandates that would transition key sectors from fossil fuel-based hydrogen to green hydrogen. As part of this potential shift, REC is poised to financially support refiners.
Furthermore, various project developers are contemplating establishing production hubs near ports to tap into the European market and beyond, as relayed by Dewangan. Financing requests for green hydrogen and ammonia initiatives in the coastal regions of Odisha, Andhra Pradesh, and Tamil Nadu have reached REC.
Highlighting the newly announced India–Middle East–Europe Economic Corridor (IMEC) at the recent G20 summit in New Delhi, Dewangan pointed to the potential export prospects it presents. He expressed REC's keen interest in the burgeoning green hydrogen and ammonia sector.
While current agreements total Rs500bn, REC maintains an open stance on financing future green hydrogen and ammonia projects, without setting a defined budget cap. The viability of infrastructure projects, ensuring borrowers can repay loans, is crucial. This could encompass ventures like pipelines or storage facilities.
Dewangan also revealed that REC is evaluating potential opportunities in neighboring nations like Bhutan, Nepal, Bangladesh, Myanmar, and Sri Lanka. He emphasized the company's readiness to fund any entity, regardless of its nationality.
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These agreements are part of a more extensive Rs2.86 trillion package earmarked for renewable energy ventures. Several renewable firms, including Avaada, ReNew, and Hero Future Energies, are slated to secure funding from REC. To accumulate funds, REC employs mechanisms like corporate bonds, green bonds, foreign currency non-resident (FCNR) loans, and bank term loans.
According to the article by Procurement Resource, Indian state-owned financier, REC, has committed to initial deals worth $6bn for green hydrogen and ammonia projects. Earlier, REC financed Acme, an Indian renewable developer, for a related project in Oman, and more financing discussions are underway for ventures in Odisha and Tamil Nadu.
State refineries have approached REC for funding, anticipating a national shift from fossil fuel-based hydrogen to green hydrogen. There's also interest in establishing production hubs near ports to cater to European demand. REC's participation in the sector is vast, considering future projects without a fixed budget, while emphasizing the importance of project viability. This investment is part of a broader commitment to renewable energy, with various renewable firms set to benefit.
