Press Information Bureau

Government of India

Ministry of Finance

30-March-2012 16:50 IST

KfW (German Development Bank) Signs A Euro 100.1 Million Loan and Financing Agreement with Rural Electrification Corporation (REC) under Indo-German Bilateral Development Cooperation

Under the umbrella of Indo-German Bilateral Development Cooperation Programme, an Agreement was signed here today between Rural Electrification Corporation (REC) and KfW (German Development Bank) for a loan of Euro 100.1 million (including a grant component of Euro 0.5 million) for financing “Clean Energy for Rural Development” projects. The loan agreement was signed by Mr. Rajeev Sharma, Chairman & Managing Director, REC and Mr. Oscar von Maltzan, Country Director (India), KfW. A Guarantee Agreement was also signed between KfW and the Government of India represented by Mr. Prabodh Saxena, Joint Secretary, Department of Economic Affairs, and Ministry of Finance.

The loan component is proposed to support such projects in the field of renewable energy and/or energy efficiency which contribute to rural development. This is the third Line of Credit that REC is receiving under the Bilateral Developemnt Programme between India and Germany.

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SS/GN

Bilateral development loan enables clean energy and energy efficiency projects for rural development under an Indo German financing agreement. A loan and financing agreement between KfW and REC under the Indo German Bilateral Development Cooperation provides a loan with an embedded grant component to finance the Clean Energy for Rural Development initiative, targeting renewable energy and energy efficiency projects that contribute to rural development. A Guarantee Agreement between KfW and the Government of India supports the transaction. This facility constitutes the third line of credit to REC under the bilateral programme and functions as a development financing instrument combining concessional grant support with loan finance.