REC avails ₹1,670 cr green loan from Deutsche Bank GIFT City

Centre-owned REC Limited will avail a green loan facility of 31.96 billion Japanese Yen translating to ₹1670.03 crore from the GIFT City branch of Deutsche Bank. The power sector financier had already availed a tranche of green loan in April 2024 from the Italian export credit agency, SACE under their Push Strategy programme.

The company is currently trading at 638.20, seeing a 1.33% hike from yesterday and briefly touched a 52-week high figure of 643.70.

“This strategic investment reinforces REC’s commitment to foster sustainable growth, in alignment with the Company’s Green Finance Framework,” read the official statement.

The recent green loan facility is equivalent to $200 million and will be used to finance eligible green projects in India.

As one of the first yen-denominated green loan transactions from Deutsche Bank’s Gift City branch, Kaushik Shaparia, CEO of the Deutsche Bank Group, India said, “Our collaboration with REC underscores our steadfast commitment to advancing environmentally responsible initiatives and promoting sustainable financing within India.”

The REC has raised a significant credit amount this year to enhance its green energy financing and sustainable projects capabilities with global community support.

The 60.536 billion JPY loan from SACE earlier this year was the latter’s first JPY-denominated loan transaction and the first green loan transaction in India, availed by the REC for the same purpose of financing eligible green projects in India.

The April green loan saw participation from global banks, which included Credit Agricole Corporate and Investment Bank, Bank of America, Citibank, KfW IPEX-Bank and Sumitomo Mitsui Banking Corporation as mandated lead arrangers.

In line with India’s initiatives towards sustainable financing, these green loans are financial products which aim to facilitate environment-friendly projects such as renewable energy installations or energy-efficient upgrades to contribute to the country’s larger target of net zero carbon emissions by 2070. Aside from REC’s green loans, the government also announced its first tranche of sovereign green bonds worth ₹8000 crore in 2023. The plan is to issue sovereign green bonds to mobilise resources for green infrastructure reflecting the rising momentum towards green financing.

The loan book of REC stood at ₹5.09 lakh crore as of the fiscal year that ended on March 31, 2024, with a net worth of Rs 68,783 crore and a net profit of ₹14019 crore.

A CPSE ranked as a Maharatna under the Ministry of Power, REC Limited is registered with RBI as a Non-Banking Finance Company (NBFC), Public Financial Institution (PFI) and Infrastructure Financing Company (IFC). The company finances the entire Power-Infrastructure sector, projects of Renewable Energy and new technologies such as Electric Vehicles, Green Hydrogen and Green Ammonia. REC also diversified recently into the Non-Power Infrastructure sector aside from providing loans to State, Central and Private Companies for infrastructure asset creation in the country. The power sector financier had already availed a tranche of green loan in April 2024 from the Italian export credit agency, SACE under their Push Strategy programme.