ReNew Power on Wednesday said it has tied up a $1 billion loan with a consortium of 12 international lenders led by Rabobank. The loan has been tied up through a special purpose vehicle and will be deployed for its hybrid round-the-clock (RTC) battery-enabled project, the company said.
ReNew Power said that this is the largest external commercial borrowing (ECB) for project finance in the country’s renewable sector, for any single project. The interest rate, after hedging, is expected to be lower than the company’s current average cost of debt on its balance sheet.
ReNew has signed a power purchase agreement with the Solar Energy Corporation of India for this project, which will see the setting up of wind and solar farms across Karnataka, Rajasthan and Maharashtra.
Sumant Sinha, founder, chairman and CEO of ReNew Power, said in the statement, “This loan — the single-largest project finance in India’s renewable sector — highlights the interest of global lenders in ReNew as it helps spearhead India’s historic clean energy shift and shows its continued ability to access financing at much lower rates than several years ago, despite the current volatility in the currency markets and a rising interest rate environment.”
He added, “This also shows the financial community’s faith in our growth plans, innovation, project execution abilities, and sound monetary management.”
The RTC project will supply power day and night and compete against the baseload of fossil-fuel energy providers such as coal.
In April, Mitsui & Co, a global general trading and investment firm, partnered with ReNew for this RTC project and picked up a 49% stake. The project will provide power to SECI at the rate of Rs 2.90 per unit to begin with, which will increase 3% annually for 15 years and then stabilise for the remaining 10 years of the 25-year PPA.
This ECB loan follows ReNew’s refinancing last month of its dollar-denominated bonds with domestic borrowings, making it the first Indian renewable company to do so, it stated.
ReNew Power develops, builds, owns and operates utility-scale wind and solar energy projects as well as hydro. ReNew has a portfolio of 12.8 GW of renewable energy projects across the country.