The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval to the Solar Energy Corporation of India (SECI) to apply to the Registrar of Companies for (i) converting it into a Section 3 company under the Companies Act, 2013 (No,18 of 2013); and (ii) renaming it as the Renewable Energy Corporation of India (RECI) . The major impact of the decision will be:-
(1) SECI will become a self-sustaining and self-generating organization.
(2) SECI will engage itself in owning solar power plants generating and selling power and in other segments of solar sector activities, including manufacturing of solar products and materials,
(3) SECI will become RECI after change of its name and then will take up development of all segments of renewable energy namely, geo-thermal, off-shore wind, tidal etc. apart from solar energy.
Section 8 of the Companies Act, 2013 [earlier Section 25 of the Companies, Act 1956] provides for formation of companies with charitable, objects. Under this provision, the commercial aspect of a business entity and its growth is completely prohibited. In comparison for a Section 3 company the object is not limited, and is mainly for commercial activities which will facilitate growth of the company. It therefore, means that a Section 8 company can only engage in activities of promotion of commerce, art, science, sports, education, research, social welfare, religion, charity etc., but not commercial activity leading to trade, buying and selling etc. resulting in profit and distribution of dividend.
The Government has also decided to enlarge the scope of the activities of SECI to cover all renewable energy sources, with a view to provide a comprehensive and optimized solution for generation of renewable energy integrating various renewable energy sources. The generation profile of solar, wind and small hydro have complementarity and generating power from these sources are likely to be more uniform. This will also reduce stress on transmission and distribution networks, resulting in better grid management. Considering this aspect, the Government has allowed the change of name from “Solar Energy Corporation of India (SECI)” to “Renewable Energy Corporation of India (RECI)”.
After approval of the Government, the SECI was registered as a Section 25 Company under the Companies Act, 1956 (now under Section 8 of the Companies Act, 2013) on 20.09.2011. SECI has initiated various activities for setting up of solar power plants as also for the promotion and commercialization of solar energy technologies, with long term perspective of assuming the role of a solar power developer.
For the first time, SECI made a profit of about 12 crore during the last financial year and has become a networth positive PSU. It is also expected to make a profit of around 300 crore this year.