NRECA and IFC Sign MOU to Develop Rural Electrification Pilot Programs in India

On April 26, 2006, NRECA International, Ltd. (NRECA) entered into a memorandum of understanding with the International Finance Corporation (IFC), and India’s power Finance Corporation (PFC) to develop rural electrification pilot programs in selected Indian states. PFC is India’s public financial institution dedicated to developing the power sector.

India’s Minister of Power, the Hon. Sushil Kumar Shinde, presided over the ceremony, which took place at the IFC headquarters. The agreement was signed by Mr. Vivek Talvadkar, Senior Vice President, NRECA International, Mrs. Farida Khambata, IFC Vice President, Portfolio and Risk Management and Dr. V. K. Garg, Chairman and Managing Director, Power Finance Corporation, Government of India.

Currently, less than half of India’s 1 billion population has access to electricity. The programs’s aim is to create pilot projects, which will include long-term technical and franchising support, and will be based on NRECA's highly successful experience with rural electrification in the United States and internationally. The Hon. Sushil Kumar Shinde iterated the urgent need for the pilot programs by noting that “a major impact on rural electrification in India and would help reach the government’s goal of universal electrification by 2012.”

The program’s proposed new rural entities will be required to be demand-driven and commercially sound, serving as models for addressing the electricity service needs of rural populations in regions that are currently unserved or underserved. The Indian states given priority for pilot projects are West Bengal, Bihar, Orissa, Madhya Pradesh, Gujarat, Punjab, and Rajasthan. After projects are implemented in the priority states, other states will be approached.