REC Limited, one of the Maharatna Central Public Sector Enterprise under the Ministry of Power, has successfully raised USD 1.15 Billion in August 2023. The loans have been tied up for a 5-year tenor and are benchmarked to Overnight SOFR (Secured Overnight Financing Rate). The proceeds from this facility shall be utilized to fund power, infrastructure and logistics sector projects as permitted under the ECB guidelines of the Reserve Bank of India. The funds have been raised under REC’s Market Borrowing Programme of Rs. 1.20 lakh crore for the year 2023-24.
The amount has been raised in two tranches from a consortium of six banks as the Mandated Lead Arrangers and Bookrunners (MLABs). The Tranche 1 of USD 505 million was raised from Bank of Baroda, Gujarat International Fin Tec-City (GIFT City) IFSC Banking Unit (IBU); Axis Bank, GIFT City IBU and State Bank of India, London Branch on August 3, 2023, while Tranche 2 of USD 645 million was raised from State Bank of India, London Branch; Bank of India, GIFT City IBU; Bank of India, London Branch and HSBC, GIFT City IBU on August 31, 2023.
Both the tranches taken together saw an aggregate commitment of USD 550 million from GIFT City IFSC Banking Units (IBUs). This is the highest ever commitment to REC from GIFT City IBUs in a single month, surpassing the earlier largest commitment of USD 345 million in December 2021.
At this occasion, the Chairman and Managing Director, REC Limited, Shri Vivek Kumar Dewangan said “REC has been actively looking for various innovative options to diversify its sources of borrowings to lower its cost of borrowings. The successful closure of these two transactions within a single month is a testimony to the strong financials of REC Ltd. and continues to remain attractive to international lenders. We are pleased with the overwhelming response of Banks to these loans, which is also our largest single-month fund raising from GIFT City IBUs. This also reinforces REC’s positioning as the largest PSU borrower from the international markets during the current year.”
REC Limited is an NBFC focusing on Power Sector Financing and Development across India. Established in 1969, REC Limited has completed over fifty years of operations. It provides financial assistance to state electricity boards, state governments, central / state power utilities, independent power producers, rural electric cooperatives and private sector utilities. Its business activities involve financing projects in the complete power sector value chain; for various types of projects including Generation, Transmission, Distribution and Renewable Energy. REC’s funding illuminates every fourth bulb in India. REC has recently diversified into financing infrastructure and logistics sector as well.