REC Ltd, a state-owned company, has successfully raised USD 500 million through green dollar bonds to fund renewable energy initiatives. The bonds, with a 5-year term, offer a 4.75% annual coupon rate, payable semi-annually, and will mature on September 27, 2029. This marks the first US dollar bond issuance by an Indian public sector company in 2024.

The funds are part of REC’s USD 10 billion global medium-term programme. They will support eligible green projects under REC’s Green Finance Framework, aligning with the Climate Bond Initiative’s principles and RBI’s ECB guidelines. Sustainable Fitch provided a second-party opinion on this initiative.

Green Finance Market

Vivek Kumar Dewangan, CMD of REC Ltd, highlighted the strong demand for these bonds despite global financial challenges. He noted that India’s role in the green finance market is well-established. The bonds will be rated Baa3/BBB– by Moody’s and Fitch and listed on the Global Securities Market of India INX and NSE IFSC in GIFT City, Gandhinagar.

Barclays, DBS, HSBC, Mizuho, MUFG, and Standard Chartered Bank acted as joint bookrunners for this bond issue. As of June 30, 2024, REC’s loan book was valued at Rs 5.30 lakh crore, with a net worth of Rs 72,351 crore.