REC Limited Secured a Green Loan for ~60.5 Billion Japanese Yen

On April 25, 2024, REC Limited, a Maharatna Central Public Sector Enterprise and leading NBFC under the Ministry of Power, announced that it had availed a Green Loan of Japanese Yen (JPY) 60.536 billion to fund eligible green projects in India. The company also stated that the Italian Export Credit Agency, SACE (Italy), under their creative Push Strategy project, is providing an 80% guarantee for the green lending facility. The partnership between SACE and REC is innovative and the first time that SACE and an Indian government agency have worked together.

The green loan facility highlights a rising commitment to sustainable financing by setting a standard for comparable green financing transactions in the Indian public sector environment. The credit also represents the first green loan transaction in India and the first loan transaction denominated in JPY for SACE.

Various institutions from Asia, the United States, and Europe have participated in the Green Loan. As mandated lead arrangers, these institutions are Crédit Agricole Corporate and Investment Bank, Bank of America, Citibank, KfW IPEX-Bank, and Sumitomo Mitsui Banking Corporation. As the coordinator for the Export Credit Agency, the Green Loan Coordinator, the Documentation Bank, and the Facility Agent, Crédit Agricole Corporate and Investment Bank will assume these roles.

For REC Limited, the lending facility is a strategic investment that upholds its mission to promote sustainable growth in line with the business’s Green Finance Framework. The green loan shows how committed REC and its partners are to funding initiatives that uphold strict environmental regulations, advance renewable energy sources, and lower carbon emissions across India. It also shows the increasing momentum that green funding is gaining, as well as the group efforts of stakeholders to address environmental issues.

“The successful transaction in this truly global facility is anticipated to pave the way for more such collaborations, further enhancing Indo-Italian business relationships in green energy financing and sustainable projects. It will also help boost the global community’s support for sustainable development projects in India,” said Chairperson & Managing Director, REC, Shri Vivek Kumar Dewangan.

“SACE is proud to partner with REC for this ‘Green Push Strategy’ transaction, which is an innovative and first-in-its-kind structure being executed in India. Through this facility, SACE is committed to supporting projects in renewable energy, green mobility and energy efficiency, enabling sustainable long-term growth in India,” said the Head of SACE – India & South Asia, Shri Gautam Bhansali.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.