REC Ltd, a state-owned enterprise, has successfully raised $500 million through green dollar bonds aimed at financing renewable energy projects. The bonds, which come with a five-year maturity period and a coupon rate of 4.75% per annum, are set to mature on September 27, 2029.
This issuance marks the first instance of a U.S. dollar bond being launched by an Indian public sector organization in 2024. The funds raised will contribute to REC’s ambitious $10 billion global medium-term program and will be allocated to projects aligned with its Green Finance Framework, adhering to the guidelines established by the Climate Bond Initiative and the Reserve Bank of India.
With ratings of Baa3 from Moody’s and BBB from Fitch, the bonds will be listed on India INX and NSE IFSC. Despite a challenging global financial landscape, the bond issuance received robust demand, highlighting India’s emerging role in the green finance sector. Barclays, DBS, HSBC, Mizuho, MUFG, and Standard Chartered Bank served as joint bookrunners for this successful issuance.
As of June 30, 2024, REC’s loan portfolio stood at ₹5.30 lakh crore, with a net worth of ₹72,351 crore.
This strategic move not only reinforces REC’s commitment to sustainable development but also showcases the growing appetite for green financing in India. As the world increasingly turns its focus towards renewable energy, REC’s initiative exemplifies how public sector entities can play a vital role in addressing climate change and promoting a greener future.