REC, a state-owned entity, has finalized a significant green loan agreement with Italian export credit agency SACE, marking a significant milestone in sustainable financing. The deal, valued at 60.5 billion Japanese Yen (approximately Rs 3,250 crore), aims to finance green projects across India.
In a statement issued by REC Ltd, a Non-Banking Financial Company (NBFC) under the Ministry of Power, the successful acquisition of the green loan from SACE underscores a breakthrough collaboration between an Indian government entity and SACE. This pioneering initiative sets a new standard in the Indian public sector for green financing, showcasing a growing commitment to sustainable development.
This green loan facility also represents a significant milestone for SACE, as it marks the agency’s first JPY-denominated loan transaction and its inaugural green loan transaction in India. The financing initiative saw participation from prominent banks across Asia, the US, and Europe, 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, in addition to its role as a Mandated Lead Arranger, will also serve as the Export Credit Agency Coordinator, Green Loan Coordinator, Documentation Bank, and Facility Agent.
The green loan facility aligns with REC Limited’s strategic vision, reinforcing its commitment to fostering sustainable growth in India. It is an integral part of REC’s Green Finance Framework, showcasing dedication to supporting environmentally responsible projects, promoting renewable energy, and contributing to carbon emissions reduction throughout the country.
Vivek Kumar Dewangan, Chairperson, and MD of REC expressed optimism about the collaboration, anticipating that it will pave the way for further Indo-Italian partnerships in green energy financing and sustainable projects. He emphasized the potential of such initiatives to bolster support for sustainable development projects in India and enhance Indo-Italian business relationships.
Gautam Bhansali, Head of SACE – India & South Asia, emphasized SACE’s commitment to supporting projects in renewable energy, green mobility, and energy efficiency through this innovative green loan facility. Bhansali highlighted the transaction’s unique structure and its potential to foster sustainable long-term growth in India.
REC‘s loan book currently stands at Rs 4.97 lakh crore, with a net worth of Rs 64,787 crore as of December 31, 2023. The green loan facility benefits from an 80 percent guarantee by SACE under its innovative Push Strategy program, further reinforcing its commitment to sustainable financing initiatives.