ReNew Power Ventures raises $50 million in debt from Yes Bank
Renewable energy company ReNew Power Ventures Pvt. Ltd has raised around $50 million in debt from Yes Bank Ltd to refinance the debt of one of its wind power projects, said two people aware of the development.
“Yes Bank has lent approximately $50 million (Rs321 crore). The money will be used by ReNew to refinance the debt of its Amba wind power project in Madhya Pradesh, which has an installed capacity of around 44 megawatts (MW),” said one of the two people cited above, on condition of anonymity as he is not authorized to speak to reporters.
The project has been commissioned recently and is generating cash flows, thus the company decided to refinance the debt of the project, which will help reduce the interest cost being paid by the company, he added.
“As part of our cost reduction strategy, we keep exploring multiple alternatives like INR bonds, Masala bonds, bank refinancing, etc., and to this effect, to refinance one of our projects in Madhya Pradesh, have tied up with Yes Bank to be the exclusive arranger through the issue of non-convertible debentures,” said Kailash Vaswani, deputy chief financial officer at ReNew Power, one of the largest renewable energy producers in the country, with operational and under-development projects worth over 3 gigawatts (GW).
Yes Bank has been, in the recent times, one of the more active lenders to the renewable sector in India.
In 2015, the bank announced that it would finance 5GW of green projects over the next five years across renewable energy and energy efficiency projects, including solar power, wind power, biomass, and small hydel projects.
It also raised capital in 2015 for lending to the renewable sector by issuing green infrastructure bonds worth Rs1,000 crore.
Subsequently the bank issued two more tranches of green bonds. In August 2015, it raised Rs315 crore from International Finance Corp. (IFC), the private sector financing arm of the World Bank, through green bonds. Last year, it raised Rs330 crore through a similar route from Dutch development finance institution FMO.
Several other private sector lenders too have taken the green bonds route to raise capital for the renewable sector. In May, Axis Bank raised $500 million through green bonds from the international market.
India has a target of installing 100GW of solar power capacity and 60GW of wind power capacity by 2022. The total installed capacity of renewable energy stands at 30GW, of which wind energy projects account for 24GW, solar contributes 5GW and the rest comes from smaller sources such as biomass.
ReNew Power, founded by Sumant Sinha, is one of the largest renewable energy producers in the country with operational and under-development projects worth over 3GW.
In February, JERA Co. Inc. bought a 10% stake in ReNew Power for around $200 million. Set up in 2015, JERA is an equal joint venture between Japan’s largest utility Tokyo Electric Power Co. (TEPCO) and Chubu Electric Power Co.
ReNew Power’s earlier backers include Goldman Sachs, sovereign wealth fund Abu Dhabi Investment Authority (ADIA) and Global Environment Fund.
ReNew Power’s recent debt financing transactions include a long-term $390 million debt funding from ADB, a $250 million credit line from Overseas Private Investment Corp. It also raised $475 million through masala bonds earlier this year.