REC secures JPY 60.5 bn green loan from Italian export credit agency SACE

The Italian Export Credit Agency SACE conducted the country’s first loan transaction denominated in yen and its first green loan transaction.

Green Loan Facility to support projects that meet rigorous environmental standards, promote renewable energy, and contribute to reducing carbon emissions

In a significant step towards sustainable development in India, REC Limited, a Maharatna Central Public Sector Enterprise and leading NBFC under the Ministry of Power, has successfully availed a Green Loan of Japanese Yen (JPY) 60.536 billion to finance eligible green projects in India. Under their innovative Push Strategy programme, the green loan facility benefits from an 80% guarantee by the Italian Export Credit Agency, SACE (Italy). The arrangement between SACE and REC is a breakthrough and a first-of-its-kind collaboration between an Indian government entity and SACE.

The green loan facility benchmarks the Indian public sector landscape for similar green financing transactions, highlighting a growing commitment to sustainable financing. The facility also marks SACE’s first JPY-denominated and green loan transactions in India.

The Green Loan has loan participation from banks across Asia, the USA, and Europe, namely Crédit Agricole Corporate and Investment Bank, Bank of America, Citibank, KfW IPEX-Bank, and Sumitomo Mitsui Banking Corporation as Mandated Lead Arrangers. Crédit Agricole Corporate and Investment Bank would act as the Export Credit Agency Coordinator, Green Loan Coordinator, Documentation Bank, and Facility Agent.

Commenting on the collaboration, Chairperson & Managing Director, REC, Vivek Kumar Dewangan said, “The successful transaction in this truly global facility is anticipated to pave the way for more such collaborations, further enhancing Indo-Italian business relationships in green energy financing and sustainable projects. It will also help boost the global community’s support for sustainable development projects in India.”

Head of SACE – India & South Asia, Shri Gautam Bhansali, commented: “SACE is proud to partner with REC for this ‘Green Push Strategy’ transaction, an innovative and first-in-its-kind structure being executed in India. Through this facility, SACE is committed to supporting projects in renewable energy, green mobility and energy efficiency, enabling sustainable long-term growth in India.”

Senior Country Officer for India, Crédit Agricole Corporate and Investment Bank, Franck Passillier, said, “The transaction exemplifies Crédit Agricole Corporate and Investment Bank’s unwavering dedication to fostering sustainable development, in line with our Bank’s leading position in global sustainable finance for more than a decade. Our strategic collaboration with REC underscores our steadfast commitment to advancing environmentally responsible initiatives and promoting the growth of sustainable financing within India’s promising market.”

 The loan facility is a strategic investment for REC Limited, which reinforces its commitment to fostering sustainable growth in alignment with the company’s Green Finance Framework.  The green loan demonstrates the dedication of REC and its partners in supporting projects that meet rigorous environmental standards, promote renewable energy, and contribute to reducing carbon emissions throughout India. It also reflects the growing momentum towards green financing and the collective efforts of stakeholders to address environmental challenges.