REC Ltd.

Rural Electrification Corporation (REC) has received an approval for sale and transfer of 50,000 equity shares of Vemagiri Transmission System (VTSL), presently held by REC Transmission Projects Company (RECTPCL) and its nominees, to Power Grid Corporation of India (PGCIL) and their nominees, substantially upon the terms and conditions as detailed in the share purchase agreement (SPA) to be executed between the RECTPCL, VTSL and PGCIL. The board of directors at its meeting held on March 30, 2012 has approved for the same.

The SPA is for establishment of transmission system associated with IPPs of Vemagiri Area-Package-A (Vemagiri Pooling Station-Khammam 765 kV 1XD/C (1st ckt.) line and Khammam-Hyderabad 765 kV 1XD/C (1st ckt.) line) subject to obtaining necessary approval from the Ministry of Power, Government of India.

Earlier on March 16, 2011, the Ministry of Power appointed RECTPCL, a wholly owned subsidiary of REC, as bid process coordinator to identify successful bidders through tariff based bidding process for establishment of transmission system associated with IPPs of Vemagiri Area-Package-A. Accordingly, RECTPCL formed a project specific special purpose vehicle (SPV) namely VTSL, as its wholly owned subsidiary company, with authorized and paid up capital of Rs 5 lakh, divided into 50,000 equity shares of Rs 10 each.

In response to the request for proposal for this project, RECTPCL received 7 financial bids and based on the recommendations of the bid evaluation committee, the board of directors of RECTPCL approved the name of PGCIL as successful bidder for issuance of letter of intent (Lol) for above project and LoI has been issued to successful bidder on March 20, 2012.

REC is engaged in providing financial assistance to state electricity boards, state government departments and rural electric co-operatives for rural electrification projects as are sponsored by them.