The power ministry has opposed any move to privatise Rural Electrification Corporation pending reforms in the sector.

The ministry has communicated its views to the Divestment Commission, which is currently finalising its recommendations on the public sector undertaking, official sources said in New Delhi.

The opposition to the move comes as the ministry feels that inducting a strategic partner in REC at this juncture when reforms in the sector are incomplete would not yeild any benefit.

The government is currently in the process of introducing broadbased changes to the sector by way of Electricity Bill as well as encouraging reforms through unbundling of electricity boards and privatising distribution circles.

REC, which was set up in 1969 as non-bank finance company, is currently involved in financing of rural electrification projects by way of giving loans to state electricity boards.

Sources said that government would not be in a position to maximise revenues by inducting a new partner as the power sector was in a precarious situation, ruling out the possibility of a lucrative bid.

The arguments of the ministry are in line with stragtegy adopted by it in case of another company namely Power Finance Corporation which is also under study by the commission.