REC Limited raises USD 75 million loan for power infrastructure projects
This will fund projects as permitted under the ECB guidelines of the Reserve Bank of India
REC Limited has successfully raised a USD 75 million, 5-year Secured Overnight Financing Rate (“SOFR”) linked Syndicated Term Loan with Sumitomo Mitsui Banking Corporation (SMBC), Singapore Branch appointed as the sole Mandated Lead Arranger and Bookrunner.
The loan, a first for any NBFC in India, was finalized on October 7, said the Ministry of Power on Thursday.
Along with the loan, REC has also entered into interest rate swap referencing SOFR to hedge the interest rate risk on this facility. This is the first such deal by any corporate in India.
The proceeds from this facility shall be utilized to fund infrastructure power sector projects as permitted under the ECB guidelines of the Reserve Bank of India.
Commenting on the successful closure of the USD Term Loan, Sanjay Malhotra, Chairman and Managing Director of REC, said, “With the imminent cessation of LIBOR and following the notification from the Reserve Bank of India on roadmap for LIBOR Transition, we are very happy to raise this SOFR linked Term Loan Facility, which is also the first one by any NBFC in India. The experience gained from the process will enable REC in USD LIBOR transition to SOFR for our existing term loans in a better manner.”
REC Limited is a Navratna NBFC focusing on Power Sector Financing and Development across India.
Established in 1969, REC Limited has completed over fifty years in the area of its 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; different type of projects includes Generation, Transmission, Distribution Projects, and Renewable Energy projects.