Rural Electrification Corporation (REC) has inked a loan agreement for $250 million amounting approximately Rs 1,350 crore with State Bank of India’s Hong Kong branch for lending to the infrastructure sector. The company has signed external commercial borrowing (ECB) agreement on March 11, 2013 at Hong Kong.
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 utilized ECB equivalent to $750 million, sanctioned by the Reserve Bank of India under the approval route.
REC is engaged in providing financial assistance to state electricity boards, state government departments and rural electric co-operatives for rural electrification projects as are sponsored by them.
