ReNew Power has announced that it has secured around $1 billion, which is roughly ₹7,900 crore loan through the External Commercial Borrowings (ECB) route. It claims that, this is the single largest ECB finance loan for a single renewable energy (RE) project in India.
The loan has been tied up with 12 international lenders, led by Rabobank. It is also ReNew’s largest ECB loan so far. As ReNew rapidly builds its portfolio, this $1 billion loan has been tied up through a special purpose vehicle (SPV) and will be deployed for its hybrid Round-the-Clock (RTC) battery-enabled project.
Speaking on the ECB loan, ReNew Power Chairman & CEO, Sumant Sinha said, “This loan highlights the interest of the 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.”
This also shows the financial community’s faith in the company’s growth plans, innovation, project execution abilities, and a sound monetary management. We will work harder to build on this much-valued trust, he added.
The RTC project will supply power day and night, and compete against the baseload of fossil-fuel energy providers such as coal, Sinha noted. The ECB loan follows ReNew’s refinancing last month of its dollar-denominated bonds with domestic borrowings, which the company claims is the first Indian RE company to do so. It refinanced its 2024 maturity dollar-denominated bonds worth $525 million, which were issued in 2019.
“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 PPA with the Solar Energy Corporation of India (SECI) for this project, which will see wind and solar farms set up across Karnataka, Rajasthan, and Maharashtra,” it added.
The project consists of three wind farms (900 MW in total), and one solar, plus battery storage farm (400 MW plus up to 100 MWh) across three states and will provide 400 MW electricity to SECI. The total cost of the project will be around $1.35 billion. The commercial operations are scheduled to start by August 2023.
In April this year, Mitsui & Co partnered with ReNew for this RTC project in whichit took a 49 per cent stake. The project will provide power to SECI at the rate of ₹2.90 per unit to begin with, which will increase 3 per cent annually for 15 years and then stabilise for the remaining 10 years of the 25-year power purchase agreement (PPA), ReNew Power said.