REC Limited receives JPY 60.5 billion green loan under SACE

Rural Electrification Corporation (REC) Limited, a leading non-banking finance company under the Ministry of Power, has received a green loan of Japanese Yen (JPY) 60.536 billion to finance eligible green projects in India. This is being considered as an important step towards sustainable development in India.

First agreement between an Indian government entity and SACE:

• Green Credit Facility supported by 80% guarantee from Italian Export Credit Agency, SACE, under Innovative Push Strategy. The arrangement between SACE and REC is a significant achievement. This is the first agreement of its kind between an Indian government entity and SACE.

Demonstrating growing commitment towards sustainable financing:

• The Green Loan Facility sets a benchmark for similar green financing transactions in the Indian public sector landscape. This reflects a growing commitment to sustainable financing. The facility also marks SACE's first Japanese Yen (JPY)-denominated loan transaction and the first green loan transaction in India.

Many major banks of the world are participating in green loans:

• Green lending involves participation from banks across Asia, the US and Europe. The major banks involved are:
  • Credit Agricole Corporate and Investment Bank
  • Bank of America
  • City Bank
  • Kfw IPEX-Bank
• Sumitomo Mitsui Banking Corporation has the loan participation as mandated lead arranger. In this, Crédit Agricole will act as Corporate and Investment Bank, Export Credit Agency Coordinator, Green Loan Coordinator, Documentation Bank and Facility Agent.
• The loan facility is a strategic investment for Rural Electrification Corporation (REC) Limited. This reinforces its commitment to promote sustainable development, in line with the company's green finance framework.

Green Loan helps in meeting stringent environmental standards:

• The green loan demonstrates the dedication of REC Limited and its partners in supporting those projects. These meet stringent environmental standards, promoting renewable energy. Also contribute to reducing carbon emissions across India. It shows momentum towards green financing and collaborative efforts to tackle environmental challenges.
• This will further boost India-Italy business relations in green energy financing and sustainable projects. It will also help in promoting support from the global community for sustainable development projects in India.

About Rural Electrification Corporation (REC) Limited:

• REC Limited holds the status of a 'Maharatna' Central Public Sector Enterprise operating under the purview of the Ministry of Power. It is registered with the Reserve Bank of India as a Non-Banking Financial Company, and Infrastructure Financing Company.
• REC finances the entire power-infrastructure sector. This includes new technologies such as renewable energy and electric vehicles, green hydrogen and green ammonia projects.
• Recently, REC has also diversified into non-power infrastructure sector, which mainly includes the following sectors:
  • Roads and Expressways
  • Metro Rail
  • Airport
  • Information technology communication
  • Social and commercial infrastructure (educational institutions, hospitals),
  • Port and electro-mechanical (E&M) work
  • Steel and Refinery
• REC Limited provides loans of various maturity periods to state, central and private companies for creation of infrastructure assets in the country.
• REC Limited is playing an important strategic role in the major schemes of the Government for the power sector. It has primarily been a nodal agency for:
  • Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya)
  • Deen Dayal Upadhya Gram Jyoti Yojana (DDUGJY)
  • National Electricity Fund (NEF) Scheme
• As a result, the distribution system was strengthened to every place in the country. Hundred percent village electrification and household electrification was done.
• Vivek Kumar Dewangan is the Chairman and Managing Director of Rural Electrification Corporation (REC) Limited.