In a significant development for the power sector and infrastructure & logistics projects in India, Rural Electrification Corporation (REC) and Punjab National Bank (PNB) have pledged to jointly finance ₹55,000 crore in loans over the next three years. The agreement, which has given a boost to their stocks, was formalized under REC's Market Borrowing Programme for 2023-24.
The Memorandum of Understanding (MoU) was signed by T.S.C Bosh, Rajeeva, and Ajoy Choudhary. This collaboration is seen as a major step towards bolstering the power and infrastructure sectors, and it is expected to have significant economic implications.
In addition to the joint financing agreement with PNB, REC has secured multiple financing deals. These include a $100 million term loan from Exim Bank, $1.15 billion for a 5-year tenor from a consortium of six banks, and $550 million from GIFT City IFSC Banking Units.
The funds raised from these agreements will be utilized in accordance with the External Commercial Borrowings (ECB) guidelines laid out by the Reserve Bank of India (RBI). These guidelines stipulate how Indian companies can borrow from foreign sources, and they are designed to regulate the process and ensure that the funds are used responsibly.
The combination of the joint financing pledge with PNB and the additional funds secured by REC signifies a robust financial backing for the company's future projects. This development underscores the commitment of REC and PNB to support infrastructural growth in India over the coming years.
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