New Delhi: REC Limited has approved a massive market borrowing programme of Rs 1.6 lakh crore for the financial year 2026–27, reinforcing its role as one of India’s major public sector infrastructure financiers.
The decision was taken at a meeting of the company’s Board of Directors held on March 25, where the state-owned lender cleared a multi-instrument borrowing plan designed to support future lending requirements, maintain liquidity flexibility and align funding with prevailing market conditions.
The approved borrowing programme will allow REC to mobilise funds through a mix of domestic and overseas instruments depending on requirement, maturity profile and asset-liability considerations.
Rs 1.4 Lakh Crore to Be Raised Through Long-Term Instruments
According to the regulatory filing, the major portion of the approved borrowing plan – up to Rs 1.4 lakh crore – will be raised through long-term market instruments.
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These include:
- capital gains tax exemption bonds
- domestic debentures
- rupee term loans
- external commercial borrowings
The company said instrument selection will depend on cost efficiency, maturity profile and market opportunities available during the year.
Short-Term Borrowings Also Included
In addition to long-term borrowing instruments, REC has also approved short-term borrowing options.
The programme includes up to Rs 10,000 crore each through:
- short-term loans
- commercial papers
These short-duration instruments are expected to support immediate liquidity requirements and short-cycle funding needs.
Flexible Fund Raising Strategy Approved
REC said the borrowing programme has been designed with operational flexibility.
Funds may be raised through different maturities and different instruments based on:
- actual requirement of funds
- asset-liability position
- prevailing market conditions
The company added that each borrowing decision will be undertaken with approval from the competent authority under powers delegated by the Board.
Board Clears Borrowing Plan for Entire FY27
The company stated that the Board of Directors, in its March 25 meeting, formally approved the market borrowing programme for the entire financial year 2026–27.
This annual borrowing approval provides REC with the framework to tap markets efficiently throughout the year without repeated board approvals for each instrument.
Borrowing Supports Lending Expansion
REC’s large borrowing programme is directly linked to its financing activities across infrastructure and power sectors.
As one of India’s major non-banking financial institutions in the infrastructure financing space, REC regularly raises large volumes of capital to fund project lending.
REC’s Strategic Role in Infrastructure Financing
REC plays a major financing role in:
- power generation
- transmission projects
- renewable energy
- distribution reforms
- infrastructure-linked public sector projects
Its borrowing programme often reflects anticipated lending demand in these sectors.
Mix of Domestic and External Borrowing to Optimise Cost
The inclusion of external commercial borrowings indicates continued effort to diversify borrowing sources.
Such diversification allows the company to manage cost of funds and access competitive capital pools.
Capital Gains Bonds Remain Key Instrument
The inclusion of capital gains tax exemption bonds also signals continued use of tax-efficient instruments to attract long-term investors.
These bonds remain an important avenue for public sector financing institutions.
Market Conditions to Guide Actual Fund Mobilisation
REC clarified that although Rs 1.6 lakh crore has been approved as the annual borrowing ceiling, actual mobilisation will depend on demand conditions and financial planning during the year.
Borrowing decisions will therefore remain dynamic rather than front-loaded.
Public Sector Financing Activity Expected to Stay Strong in FY27
The scale of REC’s borrowing approval suggests sustained financing momentum in infrastructure and power sectors during FY27.
It also reflects confidence in capital market appetite for public sector debt instruments.
About REC Limited
REC Limited is a Maharatna Central Public Sector Enterprise under the Ministry of Power, Government of India. It plays a key role in financing and implementing power sector projects across the country, with a strong focus on quality, sustainability, and capacity building in India’s energy infrastructure.
