Renewable energy developer KPI Green Energy raised Rs 670 crore through India’s first externally credit-enhanced green bonds. The issuance has a 65% guarantee from GuarantCo, part of the Private Infrastructure Development Group (PIDG).
The five-year bond, which listed on NSE, carried a coupon rate of 8.50% per annum with a quarterly amortising profile and has a rating of AA+ by CRISIL and ICRA, according to the release. SBI Capital Markets was the arranger for the issue.
“We have opened the door for the other players as well. For the renewable field, I believe this will be a very good instrument for the project owners and at the same time for the structured investors,” said Faruk G Patel, chairman and managing director in a conversation with FE. He further said that Aseem Infrastructure Finance was the major investor followed by Jio Credit and SBI Capital Markets.
Proceeds to fund clean energy expansion
The proceeds will be utilised to expand KPI Green’s solar, wind, and hybrid power portfolio, primarily across Gujarat. The projects financed are expected to provide clean electricity access to nearly 210,000 people and several businesses annually, while avoiding more than 344,000 tCO2e each year, the company said in the release.
Meanwhile, the company is also planning to Rs 3,200 crore through a loan from the State Bank of India for expansion plans at an interest rate of 8.45%. The disbursement will happen in a phased manner in 1.5 years, said Salim Yahoo, CFO, KPI Green Energy.
Eye on global bond markets
“The entire project would be of around Rs 4,400 crore, out of which bank finance will be around 75% and 25% from equity and bond market,” said Yahoo.
Moreover, renewable energy will tap the overseas market through dollar bonds in FY27, Patel told FE. “We wanted to create that picture in the market so that in the future, whenever we want to raise any money, and especially from the international funds or anything, ESG compliance will be an important part. So for that purpose, we wanted to go through a bond route and that especially a green bond route,” said Yahoo.