How Adani Green Energy plans to finance its upcoming greenfield projects

By: |
September 12, 2020 5:15 AM

The drawdown from a revolving credit facility for the greenfield capacity to be commissioned up to December 2021 will start from next month, according to company sources.

Adani Green was awarded India's largest solar generation cum manufacturing bid for 8,000 MW in June this year and has another 4,000 MW under construction.Adani Green was awarded India’s largest solar generation cum manufacturing bid for 8,000 MW in June this year and has another 4,000 MW under construction.

Adani Green Energy plans to finance its upcoming greenfield projects of 1700 MW requiring investments of $3 billion largely through international bonds. The drawdown from a revolving credit facility for the greenfield capacity to be commissioned up to December 2021 will start from next month, according to company sources.

The revolving credit facility will then be extended to greenfield projects to be executed beyond 2021.

Adani Green was awarded India’s largest solar generation cum manufacturing bid for 8,000 MW in June this year and has another 4,000 MW under construction. The company also entered into a 50:50 joint venture agreement with French energy major Total SA for operations and setting up of renewable energy projects across India. Adani Green aims to be a 25,000 MW renewable energy generator by 2025 and will require around $15 billion to fund the capacity addition and create evacuation facilities.

Sagar Adani, executive director of Adani Green, in response to a query from FE: “By end of October and beginning of November is when we will start the drawdown. Along with the letter of credits that we have for Adani Green, all projects up to December 2021 can be fully funded through this facility. It will be a revolving facility and will be used for all the projects that will come up for execution beyond that.”

The company is looking at an international funding options as the size, scale and volume of projects have increased and it would help the company to keep under construction greenfield projects funded at all times. “Earlier we looked at international funding to refinance the high cost domestic loans, however, now with growth in size and volumes, it will be necessary to keep all greenfield projects fully funded through international funds,” Adani said.

The company is also in advance stage of disussion to acquire Essel Infrastructure’s 205 MW solar assets and expects to complete the acquisition by end of September quarter. “All the work is done, we are just waiting for some statutory approvals and we expect that to happen by the end of current quarter,” Adani said.

Adani Green on Friday reported a cash profit of Rs 232 crore during April-June quarter of 2020, an increase of 9% year-on-year (y-o-y) on the back of higher solar and wind energy sales, and higher operating margins. The revenue from operations for the June quarter rose 10% year-on-year to Rs 609 crore, while earnings before interest, taxes, depreciation, and amortisation rose 12% year-on-year to Rs 555 crore. The operating margins rose 100 basis points year-on-year to 91% in the June quarter of 2020.

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