State Bank of India SBI to loan Rural Electrification Corporation (REC) USD 250 million

NEW DELHI, MAR 14 — State-run Rural Electrification Corporation (REC) today said it has signed a loan agreement for $250 million with State Bank of India’s Hong Kong branch for lending to the infrastructure sector.

“REC signed ECB (external commercial borrowing) agreement for $250 million at Hong Kong with State Bank of India,” an official statement said.

The company also said the bilateral term-loan agreement signed at Hong Kong on March 11, 2013 with State Bank of India is for $250 million (approximately Rs 1,350 crore).

The funding for the same is to be done by an offshore branch of State Bank of India, being the sole lender, it said.

REC Chairman, Rajeev Sharma exchanged the loan facility agreement with the officials of State Bank of India, Hong Kong.

“The proceeds of the loan shall be utilised by REC towards on lending to the Infrastructure Power Sector,” it added.

The loan carries a floating rate of interest linked to 6-month LIBOR and has a door-to-door maturity of three years.

Libor is the interest rate top-quality banks charge each other for loans.

With this, REC during the financial year 2012-13 has fully utilised External Commercial Borrowings equivalent to $750 million, sanctioned by the Reserve Bank of India under the approval route.

REC is engaged in financing power projects mainly in rural India.