Rural Electrification Corporation (REC), a prominent power financing PSU, has successfully secured a green loan of 31.96 billion Japanese Yen (equivalent to USD 200 million) from Deutsche Bank AG. This loan aims to finance eligible green projects across India, reinforcing the country’s commitment to sustainable development.
In a statement, REC highlighted that this green facility marks the first successful collaboration between an Indian government entity and Deutsche Bank AG, GIFT City branch. This partnership sets a significant benchmark in the Indian public sector landscape, underscoring a growing trend towards sustainable financing. “This facility demonstrates REC Limited’s and its partners’ dedication to supporting projects that adhere to stringent environmental standards, promote renewable energy, and contribute to reducing carbon emissions throughout India,” the company stated.
Moreover, the loan agreement reflects the increasing momentum towards green financing and the collective efforts of stakeholders to address pressing environmental challenges. The successful transaction aligns with REC’s commitment to enhancing its green energy financing and sustainable project capabilities, while also garnering global support for sustainable development initiatives in India. This benchmark transaction is anticipated to pave the way for future collaborations, aiding the nation’s goals in green space financing. REC, a ‘Maharatna’ company under the administrative control of the Ministry of Power, Government of India, is registered with the RBI as a Non-Banking Finance Company (NBFC), Public Financial Institution (PFI), and Infrastructure Financing Company (IFC). The company finances the entire power infrastructure sector, including generation, transmission, distribution, renewable energy, and new technologies such as electric vehicles, battery storage, pump storage projects, green hydrogen, and green ammonia projects.
Highlighting the importance of this collaboration, an official from REC stated, “This successful transaction is in line with REC’s commitment to enhance its green energy financing and sustainable projects capabilities. This benchmark transaction is anticipated to pave the way for more such collaborations in the future, which can help in achieving the nation’s goals in green space financing.” Deutsche Bank also expressed its commitment to advancing environmentally responsible initiatives in India. An official from the bank stated, “Our collaboration with REC underscores our steadfast commitment to promoting sustainable financing within India. This transaction reinforces Deutsche Bank’s expertise in green financing, demonstrating our ability to support clients in their transformation towards a carbon-free future.”
In recent developments, REC has diversified into the non-power infrastructure sector, including roads and expressways, metro rail, airports, IT communication, social and commercial infrastructure (educational institutions, hospitals), ports, and electro-mechanical (E&M) works in various other sectors like steel and refinery. REC provides loans of various maturities to state, central, and private companies for the creation of infrastructure assets in the country. This strategic move by REC not only strengthens its portfolio but also contributes significantly to India’s sustainable development goals, setting a precedent for similar initiatives in the future.
