ReNew Power Ltd. said it has raised $1 billion or Rs 8,000 crore via external commercial borrowing through a consortium of 12 international lenders led by Rabobank in the largest such funding for a single project in India.
The funds, tied up through a special purpose vehicle, will be used to finance its hybrid round-the-clock battery-enabled project, the company said in a statement. The interest rate, after hedging, is expected to be lower than the company’s current average cost of debt, the statement said.
“The loan highlights the interest of global lenders in ReNew given its ability to access financing at much lower rates, despite the current volatility in the currency markets and a rising interest rate environment,” said Sumant Sinha, founder, chairman and chief executive officer at ReNew Power.
“This also shows the financial community’s faith in our growth plans, innovation, project execution abilities, and sound monetary management,” he said.
ReNew has a power-purchase agreement with the Solar Energy Corporation of India for the 1,300 MW project. It will have wind and solar farms set up across the states of Karnataka, Rajasthan, and Maharashtra.
The project will provide round the clock power to SECI at the rate of Rs 2.90 per unit in the fist year. Thereafter, the rate will be increased at 3% annually for the next 15 years. The price will be stable in the last 10 years of the 25-year power purchase agreement.
Mitsui & Co., a global general trading and investment firm, had in April bought 49% stake in the project.