REC Limited Makes Historic Move with Inaugural Japanese Yen Green Bonds

In a groundbreaking move, REC Limited, a Maharatna Central Public Sector Enterprise under the Ministry of Power, has successfully ventured into the international bond market with its inaugural Japanese Yen (JPY) 61.1 billion Green bonds. 

This marks REC Limited's eleventh international bond issuance and a significant milestone as the first Indian PSU to issue Yen Green Bonds.

The issuance includes 5-year, 5.25-year, and 10-year bonds with yields of 1.76 percent, 1.79 percent, and 2.20 percent, respectively. 

Notably, this transaction represents the largest-ever Euro-Yen issuance in South and South East Asia, the largest Yen-denominated issuance from India, and the largest non-sovereign Yen-denominated issuance ever from the region.

The success of the bonds is evident in the substantial interest from both Japanese and international investors, with orders evenly distributed at 50 percent. The international allocation for this Indian Yen deal stands out as one of the highest in the market.

REC Limited's Chairman and Managing Director, Vivek Kumar Dewangan, emphasized the significance of this move in the context of India's energy transition and said, “The journey towards India's energy transition demands a visionary approach to financing that aligns with our commitment to sustainable development towards a cleaner and greener energy landscape. REC stands resolute in its pledge to promote green and clean energy through this green issuance. As a frequent issuer in the international debt capital markets, we are always on the lookout to tap new markets and further diversify our funding sources." 

"We are delighted to successfully price our inaugural Euro-Yen Green bonds, which reaffirms REC’s position as an established issuer with deep access to global funding while maintaining the overall cost of funding lower than the industry standards,” he added. 

The Green Bonds' proceeds will be dedicated to financing Eligible Green Projects in line with REC Limited's Green Finance Framework, RBI’s External Commercial Borrowings Guidelines, and relevant approvals. 

The notes, rated Baa3/BBB–/BBB+ (Moody's/Fitch/JCR), will be listed exclusively on the Global Securities Market of India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar, Gujarat.

Leading the joint management of this landmark issue are DBS Bank, Mizuho, MUFG, and SMBC Nikko. This move not only reinforces REC Limited's commitment to green initiatives but also sets a precedent for Indian PSUs in the global financial landscape.