REC board approves Rs 1.55 trillion bond plan, to strike off Rajgarh III SPV

REC Ltd has announced two major decisions following its board meeting held on June 4, 2025.

First, the company plans to raise to Rs 1.55 trillion through private placement of unsecured or secured non-convertible debentures or bonds. This fundraising, subject to shareholder approval, will take place over the next year in one or more tranches, with clearances from the competent authority.

Second, REC has proposed striking off “Rajgarh III Power Transmission Ltd,” a wholly owned subsidiary of REC Power Development and Consultancy Ltd (RECPDCL), subject to necessary statutory and administrative approvals.

Rajgarh III Power Transmission Ltd was set up on December 24, 2024, by RECPDCL. It was intended to act as the project-specific special purpose vehicle (SPV) for an ISTS-TBCB (Inter-State Transmission System – Tariff Based Competitive Bidding) project titled “Transmission system for evacuation of power from RE projects in Rajgarh (1,500 MW) SEZ in Madhya Pradesh – Phase III.”  

However, on January 6, 2025, the National Committee on Transmission (NCT) recommended that the Rajgarh – Phase III scheme be clubbed with another TBCB scheme: “Transmission system for evacuation of power from RE projects in Neemuch (1,000 MW) SEZ – Phase II.”  

While RECPDCL was named as the bid process coordinator (BPC) for the Rajgarh project, PFCCL (PFC Consulting Ltd) was initially selected as the BPC for Neemuch. Both schemes were de-notified by the Ministry of Power on March 18, 2025, and were later clubbed into a single scheme under RECPDCL’s coordination.

The merged project, now titled “Transmission system for evacuation of power from RE projects in Rajgarh (1,500 MW) SEZ and Neemuch (1,000 MW) SEZ in Madhya Pradesh,” has an estimated cost of Rs 3,472 crore. It includes 850 circuit km of 400 kV lines and a new 400/220 kV, 2×500 MVA substation at Handiya. Additional works will be undertaken at Pachora, Rajgarh and Neemuch pooling stations.

The project is being developed entirely within Madhya Pradesh and is expected to be completed within 24 months from the transfer of the SPV to the selected developer. The clubbing of the schemes was driven by the lack of adequate land near the Pachora pooling station. Under the new plan, the developer will coordinate with Rewa Ultra Mega Solar Ltd (RUMSL) and other developers for land acquisition.

RECPDCL has initiated the bidding process for the clubbed scheme. Technical bids have been received, and price bids are expected to open on June 23, 2025. The SPV transfer is tentatively scheduled for July 12, 2025. However, the new SPV for the clubbed project is yet to be formally incorporated.