Long Term Loan - Private Sector Generation

Extent of Funding:

The exposure will be limited to 50% of the project cost except for projects up to 100 MW size, where REC may take full exposure in project debt. However, the overall exposure at group or parent company level will be limited to prudential norms under the purview of the RBI prudential norms and the norms approved by the REC board from time to time.

Debt – Equity contribution:

D:E ratio may range from 80:20 to 65:35, depending on the Integrated Rating of the Project.

Upfront Equity:

The upfront equity requirement for a Project may range from 15% to 30% of Project Equity, depending on the Integrated Rating of the Project.

Moratorium Period:

The moratorium period for principal repayment may be up to twelve (12) months from the Commercial Operation Date (COD).

Repayment Period:

The Repayment Period in addition to moratorium period shall be as below:

• Coal based projects - 18 years
• Gas/ Mixed Fuel based projects - 15 years
• Hydro projects - 22 years

Higher Repayment Period may be considered based on the merit of case. However moratorium and repayment period should not exceed 85% of the economic life of the project

Security Package:

Standard Security Package:

• Mortgage of all immovable properties
• Hypothecation of movable properties, present and future book debt, bills etc
• First charge by way of assignment or creation of security interest including all rights, title, interest, benefits, claims and demands of the Borrower in Project Documents, Contracts, Clearances, Letters of Credit, Insurance Proceeds etc.
• Pledge of shares (Minimum 51% of each instrument of promoter contribution)

Collateral Security:

Additional security/collateral would be required according to risk perception. Following additional measures may be taken as per the Integrated Rating:

• Corporate Guarantee of either parent company/holding company/ associate/ affiliate
• Charge on assets of group/other companies which are not financed by any other Lenders
• Option to convert up to 10% of REC’s loan disbursed into equity shares at book value

Fee Structure:

Processing Fee:

0.1% of loan sanction amount subject to a minimum of INR 5 lakh and a maximum of INR 50 lakh.

50% of the Processing Fee shall be paid at the time of submission of loan application. The balance amount of Processing Fee shall be paid on or before the date of issuance of sanction letter.

Upfront Fee:

Upfront Fee may range from 0.15% to 0.25% of Loan Amount, depending on the Integrated Rating of the Project.

100% of the upfront fee shall be payable on or before documentation.

Lead Fee:

Lead Fee may range from 0.10% to 0.25% of Project Debt, depending on the Integrated Rating of the Project.

100% of Lead fee shall be payable on or before documentation. In cases where REC is the sole lender, lead fees shall also be charged.