REC Raises $500 Mn Through Green Bonds

REC Raises $500 Mn To Finance Clean Energy Projects Through Green Bonds

REC Limited, a state-owned infrastructure company has raised $500 million through 5-year green bonds as part of its $10 billion Global Medium-Term Program. REC plans to use these funds to finance eligible green energy projects that qualify under its green finance framework.

REC a ‘Maharatna’ company under the administrative control of the Ministry of Power, Government of India, developed a green finance framework that aligns with the Green Bond principles of the Climate Bonds Initiative, London, and the RBI’s ECB Guidelines, with a second-party opinion from Sustainable Fitch.

The five-year note carries a semi-annual coupon rate of 4.75% per annum and matures on September 27, 2029. It’s one of the first US dollar bond issuances from an Indian public sector undertaking in 2024. The final order book was oversubscribed by more than 1.9 times, allowing REC to achieve the tightest spread ever of 127.5 basis points over the US Treasury for a 5-year dollar bond issuance by an Indian non-banking financial institution, the company said.

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Vivek Kumar Dewangan, Chief Managing Director (CMD) of REC Limited, said, “We look forward to continuing our work with global investors, stakeholders, and partners to create lasting value while addressing one of the most critical challenges of our time: climate change.”

The notes are rated Baa3/BBB— (Moody’s/Fitch) and will be listed exclusively on the Global Securities Market of the India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar, Gujarat. The book runners for the issue were Barclays, DBS, HSBC, Mizuho, MUFG, and Standard Chartered Bank.