TN Power Surge: REC Sanctions ₹850 Cr for 54 New Substations

The Rural Electrification Corporation (REC) has sanctioned a loan of ₹850 crore to the Tamil Nadu Transmission Corporation (TANTRANSCO) for the construction of 54 new 110 kV substations across the state, including in Chennai.

With Tamil Nadu’s power demand increasing at 6% annually, the state’s electricity requirement is projected to exceed 27,541 MW by 2030. The sanctioned loan, offered at an interest rate of 9.25%, will help strengthen the state’s power transmission infrastructure to meet this growing demand.

Despite this development, TANTRANSCO and other state power utilities collectively face a debt burden of around ₹1.7 lakh crore, raising concerns about the impact of high interest rates, which currently range between 9.25% and 12.65%.

REC has already extended approximately ₹80,000 crore to Tamil Nadu for various power infrastructure projects and is reportedly considering interest rate reductions to ease the financial stress on the sector.

News by Rahul Yelligetti.