REC Limited, a leading public sector enterprise in India’s power sector, has successfully raised $500 million through the issuance of five-year Green Bonds. The bonds, which form part of REC’s $10 billion Global Medium-Term Programme, are earmarked for financing Eligible Green Projects under REC’s Green Finance Framework. The framework adheres to the principles of the Climate Bond Initiative, London, and the Reserve Bank of India’s (RBI) External Commercial Borrowings (ECB) guidelines, with a second-party opinion provided by Sustainable Fitch.
The bonds carry a semi-annual coupon rate of 4.75% per annum and will mature on 27 September 2029. Notably, this is the first USD bond issuance by an Indian Public Sector Undertaking (PSU) in 2024. The issuance was met with strong investor demand, with the final order book oversubscribed by more than 1.9 times. This enabled REC to achieve a spread of 127.5 basis points over the U.S. Treasury rate, the tightest spread ever achieved by an Indian Non-Banking Financial Institution (NBFI) for a five-year USD issuance.
The proceeds from the bond issuance will be used to finance various green and sustainable infrastructure projects, further reinforcing India’s commitment to environmental stewardship and sustainable development.
Vivek Kumar Dewangan, Chairman and Managing Director of REC Limited, expressed his satisfaction with the outcome, ‘This green bond issuance underscores the faith that global investors continue to place in REC’s financial strength and strategic direction. The overwhelming demand for our green bonds, amidst a challenging global financial environment, reflects the established standing of India as a key player in the green finance market.’
This bond issuance further cements REC’s reputation as a leading issuer in the international green bond market, while also contributing to India’s broader ambitions for green energy and sustainable infrastructure growth.
