ReNew Power Secures $1 Bn; Single-Largest Project Funding in India’s Renewable Energy Sector

Adding another feather in its cap, Sumant Sinha-led ReNew Power has secured a USD 1 billion loan from Rabobank-led twelve international lenders. It would be the largest External Commercial Borrowings (ECB) project finance loan in the country’s renewable energy sector, for any single project.

Commenting on the ECB loan, Sumant Sinha, Founder, Chairman and CEO of ReNew Power, said, “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.”

Sinha further added “this also shows the financial community’s faith in our growth plans, innovation, project execution abilities, and sound monetary management. We will work harder to build on this much-valued trust.”

Moreover, this loan has been tied up through a special purpose vehicle (SPV) and would be deployed for ReNew’s hybrid Round-the-Clock (RTC) battery-enabled project.

The interest rate, after hedging, is expected to be lower than the company’s current average cost of debt on its balance sheet.

The Indian Independent Power Producer has signed a power purchase agreement (PPA) with the Solar Energy Corporation of India (SECI) for this project, which would see wind and solar farms set up across Karnataka, Rajasthan, and Maharashtra states.

The RTC project will supply power day and night and compete against the baseload of fossil-fuel energy providers, such as coal.

In April, global general trading and investment firm Mitsui partnered with ReNew for this RTC project where it took a 49 per cent stake.

This project would provide power to SECI at the rate of Rs 2.90 per unit, to begin with, which would increase 3 per cent annually for 15 years and then stabilise for the remaining 10 years of the 25-year PPA.

This ECB loan follows the Gurugram-headquartered company’s refinancing last month of its dollar-denominated bonds with domestic borrowings, becoming the first Indian renewable company to do so.