Piramal Finance Limited (PFL), a part of Ajay Piramal-controlled Piramal Enterprises has sanctioned Rs 700 crore to ACME Solar Holdings, Delhi-based Independent Power Producer with a portfolio of over 1.8 GW of solar power across the 14 states. The lending was done through Corporate Finance Group (CFG) of PFL.

This is the second round of funding availed by ACME Solar from Piramal’s financial arm. Earlier in 2016, ACME Solar raised Rs 499 crore from PFL and its partner, Dutch pension fund APG Asset Management NV.

ACME Solar is planning to use the funds to invest in solar and electric transportation business and ensure timely completion of projects. Company’s current operational capacity is over 1 GW and expected to reach 1.4 GW by September end. ACME Solar’s current turnover is around Rs 4,500 crore with solar business contributing over 80 per cent of it while rest coming from telecom and household and industry-based energy storage business.

In May this year, ACME Solar announced venturing into electric vehicle space by partnering with Ola. The company set up EcoCharge Battery Swapping and Charging Stations for Ola for the its pilot project at Nagpur City in which 200 vehicles, including buses,cars and autos, running on electricity. ACME is currently planning to replicate this project in other states and with other aggregators in future.

When asked about other ways of fund-raising the company has been exploring, including going for an IPO or listing solar assets through infrastructure investment trust (InvIT), Dhingra said while equity fund raise is in process, the company is currently fully funded from its internal accruals till FY18.

Focus on RE

According to Khushru Jijina, Managing Director, Piramal Finance, renewable energy has been one of the key focus areas for Piramal Group as it believed given the government’s focus on clean energy, renewables will be one of the key contributors to the energy requirement of the country. Apart from investments in ACME Solar, PFL and APG last year announced their plans to fund Essel Green Energy, the solar platform vehicle of Essel Infraprojects Ltd, to the tune of Rs 900 crore.

Excluding the recent round of funding for ACME, PFL has so far invested approximately Rs 760 crore in the renewable sector, Jijina told BusinessLine, and it is planning additional sanctions of approximately Rs 1,500 crore. “We believe that the renewable energy sector is changing rapidly and our sector limits would get dynamically allocated based on the risk-weight on the various products that we roll-out for the sector,” he said.

The second round of funding has happened as a Flexi Line of Credit with ability to draw or repay, hence, such funding would not be possible from the APG fund under current FPI regulations, Jijina explained. However, the investment platform set up by PFL and APG in 2014 with commitment to invest $1 billion in infrastructure companies in India over 3 years, continues to actively evaluate deals, according to Jijina. So far the platform has disbursed around Rs 1900 crore.

Flexi Line of Credit

The second round of lending ACME Solar through Flexi Line of Credit also marks the entry of Piramal’s financial arm into the new product line - Flexi Line of Credit for the renewable energy sector. Last year, PFL has entered this niche generally dominated by banks by introducing credit lines and flexi lease rental discounting, known as LRD, for real estate developers.

Within three months after launching LRD, the company has sanctioned Rs 2,000 Crore for completed commercial assets that include office and retail space, the company said in February, achieving 20 per cent of Rs 10,000 crore target for LRD set in November 2016 for the next 12-15 months.

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