REC Raises $500 Million to Finance Green Initiatives

State-owned REC Ltd has successfully raised $500 million through a green dollar bond issuance, a significant step towards supporting various renewable energy projects in India. The 5-year note, with a coupon rate of 4.75%, is set to mature on September 27, 2029. This marks the first US dollar bond issuance by an Indian public sector enterprise in 2024, underscoring the company’s commitment to sustainable financing.

The latest fundraiser is part of REC’s ambitious $10 billion global medium-term program. The proceeds will be allocated to finance eligible green projects, aligned with the company’s Green Finance Framework, Climate Bond Initiative principles, and RBI’s ECB guidelines. A second-party opinion from Sustainable Fitch ensures the issuance’s adherence to these standards.

Barclays, DBS, HSBC, Mizuho, MUFG, and Standard Chartered Bank acted as joint bookrunners for the bond issuance. As of June 30, 2024, REC’s loan book stood at a substantial Rs 5.30 lakh crore, and its net worth reached ₹72,351 crore. This successful green bond issuance further strengthens REC’s position as a leading player in India’s renewable energy sector.

“The overwhelming demand for our green bonds, amidst a challenging global financial environment, reflects the established standing of India as a key player in the green finance market,” said Vivek Kumar Dewangan, CMD of REC Ltd.

The notes will be rated Baa3/BBB (Moody’s/Fitch) and will be listed on the Global Securities Market of India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar, Gujarat.

About REC Ltd

REC is a Central Public Sector Undertaking under the Ministry of Power involved in financing projects in the complete power sector value chain from generation to distribution.

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.