ReNew Power is looking to raise $350 million through a syndicated loan to fund capital expenditure, two sources close to the development said. The company has mandated Standard Chartered Bank as the sole arranger for the loan, which will be secured against assets of a project under construction, both the sources said.
The Indian renewable power producer is trying to raise a five-year project finance loan for a 300MW under-construction solar project in the Indian state of Rajasthan, the sources said. The company expects the syndication to be launched early next quarter, the second and a third source said.
ReNew has been able to tap external commercial borrowings, or ECBs, from banks at tight pricing, according to the first two sources. In Aug. 2022, the company raised a $1 billion ECB project finance loan led by Rabobank at pricing of SOFR+ 250bps, the second and third source said. The overall cost of the ECB loan from a group of 12 banks was around 9% including the hedging costs, the third source said. While the pricing on the new project loan is yet to be decided, it is likely to be priced “competitively”, since the loan is much smaller than the Rabobank ECB, the second and third sources said.
While the company is seeking USD-denominated debt from banks, it has also been actively raising INR loans to curtail its costs, the second source said. In Nov, 2022, ReNew raised an INR 8 billion ($ 97.85 million) green loan from Bank of America at a pricing of around 9% to refinance an existing offshore loan, helping it save on the hedging costs given the sharp depreciation of the INR against the USD since the beginning of the year, according to a news report by
The Economic Times. The company in its
earnings review for the quarter ended Sept. 30, 2022 stated that INR debt comprises almost 50% of its outstanding debt.
As of Sept. 30, ReNew Power’s portfolio capacity stood at 13,368.5MW, of which 7,698.5MW has been commissioned, with the remainder expected to be commissioned fully in the next 18 to 24 months. Consolidated gross debt stood at INR 466.937 billion as of Sept. 30, with around 50% of it denominated in domestic currency. In its fiscal second-quarter results for the period ended Sept. 30, ReNew Power reported that revenue from contracts with customers grew 15.1% year over year to INR 19.56 billion, while adjusted EBITDA was almost flat at INR 18.209 billion.
A spokesperson for ReNew Power did not respond to an email sent seeking comment on the development. A Standard Chartered Bank spokesperson declined to comment.
–Malvika Joshi, Vivek Varendra