REC raises about Rs 3,500 crore via yen-denominated green bonds

State-owned REC Ltd on Friday said it has raised JPY (Japanese Yen) 61.1 billion (about Rs 3,500 crore) by issuing green bonds. Proceeds from the issue of the Bonds will be applied to finance the eligible green projects in accordance with the company’s Green Finance Framework, the RBI‘s ECB guidelines and the approvals granted by it from time to time, a statement said.

According to the statement, REC Ltd has successfully issued its inaugural JPY 61.1 billion 5-year, 5.25-year and 10-year Green bonds issued under its USD 10 billion Global Medium Term Notes Programme.

The REC Ltd’s eleventh venture into the international bond market and inaugural Yen Bond issuance, which is also the first Yen Green Bond issuance by any Indian PSU.

This is a 5-year, 5.25-year and 10-year bond issued at a yield of 1.76 per cent, 1.79 per cent and 2.20 per cent, respectively.

It is the largest ever Euro-Yen issuance in south and southeast Asia and the largest Yen-denominated issuance from India.

It is the largest non-sovereign Yen-denominated issuance ever from south and southeast Asia. Vivek Kumar Dewangan, Chairman and Managing Director, REC Ltd, said, “REC stands resolute in its pledge to promote green and clean energy through this Green issuance. As a frequent issuer in the international debt capital markets, we are always on the lookout to tap new markets and further diversify our funding sources”. “We are delighted to successfully price our inaugural Euro-Yen Green bonds, which reaffirms REC’s position as an established issuer with deep access to global funding while maintaining the overall cost of funding lower than the industry standards,” he added.

The notes will be rated Baa3/BBB-/BBB+ (Moody’s/Fitch/JCR) and will be listed exclusively on the Global Securities Market of India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar, Gujarat. DBS Bank, Mizuho, MUFG, and SMBC Nikko are the joint lead managers for the issue, as per the statement.

REC is a ‘Maharatna’ company under the administrative control of the Ministry of Power and is registered with the RBI as a non-banking finance company (NBFC), public financial institution (PFI) and infrastructure financing company (IFC).

It is financing the entire power-infrastructure sector comprising generation, transmission, distribution, renewable energy and new technologies like electric vehicles, battery storage, pump storage projects, green hydrogen, green ammonia projects etc.

REC Ltd provides loans of various maturities to state, central and private companies for the creation of infrastructure assets in the country.