SPV set to start work on new inter-state power transmission project in Maharashtra
The bidding process was carried out by REC Power Development and Consultancy Limited (RECPDCL), a wholly owned subsidiary of public sector finance giant REC Limited.
India’s leading public sector Undertaking, Rural Electrification Corporation (REC), became the first NBFC to successfully raise a USD 75 million five year secured overnight finance rate (SOFR) linked Syndicated Term Loan with Sumitomo Mitsui Banking Corporation (SMBC).
This is for the first time that an Indian Non Banking Finance Company managed SOFR from an International Bank. Not only this the REC has also entered into interest rate swap referencing SOFR to hedge the interest rate risk on this facility, said a senior officer of the Power Ministry.
The proceeds from this facility would be utilized to fund infrastructure power sector projects as permitted under the ECB guidelines of the Reserve Bank of India, the Ministry said.
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“With the imminent cessation of LIBOR and following the notification from the Reserve Bank of India on the 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,” said Sanjay Malhotra, Chairman and Managing Director of REC.
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, 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 types of projects include Generation, Transmission, Distribution Projects, and Renewable Energy projects.
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