REC secures JPY 60.5 billion green loan from Italian export credit agency SACE

REC Ltd has achieved a significant milestone by securing a green loan worth 60.5 billion Japanese Yen (approximately Rs 3,250 crore) from the Italian export credit agency, SACE. This financing endeavor marks a pivotal moment in sustainable financing for REC and underscores the growing commitment to green projects in India.

REC Ltd., operating under the Ministry of Power as a Non-Banking Financial Company (NBFC), has successfully obtained this substantial green loan to finance eligible green projects within India. This collaboration between REC and SACE represents a groundbreaking initiative, being the first of its kind between an Indian government entity and SACE.

The green loan facility not only sets a new standard in the Indian public sector for similar green financing transactions but also signals a profound dedication to sustainable financing practices. Furthermore, it marks a significant milestone for SACE, representing its inaugural JPY-denominated loan transaction and its first green loan transaction in India.

Participation in the green loan has been widespread, with banks from Asia, the US, and Europe joining in, including Credit Agricole Corporate and Investment Bank, Bank of America, Citibank, KfW IPEX-Bank, and Sumitomo Mitsui Banking Corporation, acting as Mandated Lead Arrangers.

Credit Agricole Corporate and Investment Bank will serve multiple roles in the transaction, including acting as the Export Credit Agency Coordinator, Green Loan Coordinator, Documentation Bank, and Facility Agent. This multifaceted approach underscores the complexity and significance of the green loan facility.

For REC Limited, this green loan represents a strategic investment that reinforces its commitment to fostering sustainable growth in alignment with its Green Finance Framework. The loan demonstrates REC's dedication, along with its partners, to supporting projects that meet rigorous environmental standards, promote renewable energy, and contribute to reducing carbon emissions throughout India.

Vivek Kumar Dewangan, Chairperson, and MD of REC, expressed optimism about the transaction's impact on future collaborations, anticipating enhanced Indo-Italian business relationships in green energy financing and sustainable projects. He highlighted the potential for increased global support for sustainable development projects in India.

Gautam Bhansali, Head of SACE – India & South Asia, emphasised SACE's commitment to supporting projects in renewable energy, green mobility, and energy efficiency through this partnership with REC. This innovative structure marks a significant step towards enabling sustainable long-term growth in India.

As of December 31, 2023, REC's loan book stands at Rs 4.97 lakh crore, with a net worth of Rs 64,787 crore. The green loan facility benefits from an 80% guarantee by the Italian export credit agency SACE under their innovative Push Strategy program, further enhancing its appeal and sustainability.

In conclusion, REC's successful acquisition of the green loan from SACE represents not only a financial milestone but also a testament to the growing momentum towards sustainable financing and collaborative efforts to address environmental challenges on a global scale.