Editor Synopsis
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Ahmedabad, 2 May 2024: Adani Green Energy Ltd (AGEL), India’s largest and one of the world’s leading renewable energy (RE) companies, today announced USD 400 million financing for its under-construction 750 MW solar projects in Rajasthan and Gujarat by a consortium of five leading international banks. It will provide financing for projects that are expected to come online from November 2024 onwards.
One of the projects is being developed in Rajasthan with 500 MW capacity and has a long-term power purchase agreement (PPA) with the Solar Energy Corporation of India (SECI). The second one, with 250 MW capacity, is a standalone merchant power project being implemented at the world’s largest RE cluster at Khavda in Gujarat. With confidence in the evolving merchant energy market, AGEL is diversifying revenue streams, along with traditional PPAs, to enhance project revenue and position itself favorable for sustained value creation. Following AGEL’s lead, banks are becoming more comfortable with financing merchant projects with the transaction marking a sentiment shift in the international banking market.
The USD 400 million construction facility along with the funding solutions also provides the syndicated guarantee-backed assurance program in sync with AGEL’s procurement strategy. The transaction paves the way for a sustainable debt structure, developed as part of AGEL’s capital management plan, for financing merchant exposure. It marks a milestone for the Indian RE sector as it steers the industry’s transition to the next phase of market integration, with the commitment to deliver the low-cost green electrons through promotion of merchant market projects with right financing structure demonstrating overall trust and competitiveness for the Indian renewable energy sector to drive clean energy transition and decarbonisation.
The consortium of lenders – Cooperative Rabobank U.A., DBS Bank Ltd., Intesa Sanpaolo S.p.A., MUFG Bank, Ltd., and Sumitomo Mitsui Banking Corporation – paves the way for AGEL’s ambitious growth plans.
The green loan, housed under subsidiaries of AGEL supports the company’s growth trajectory and aligns with its commitment to sustainability. Second party opinion provider Sustainable Fitch highlighted the robustness and transparency of the 750 MW Solar Projects Green Loan Framework and alignment with the four core components of the Green Loan Principles, 2023. The assessment favours AGEL’s dedication to green energy solutions, accelerating India’s transition towards a lower carbon future while achieving UN Sustainable Development Goals (SDGs), especially SDG 7 (affordable and clean energy).
AGEL has 10,934 MW operational portfolio, largest in India, delivering reliable, affordable, and clean power to the national grid. AGEL’s operational portfolio consists of 7,393 MW solar, 1,401 MW wind and 2,140 MW wind-solar hybrid capacity.
Latham & Watkins LLP and Saraf & Partners were the borrower’s counsel. The lenders’ counsel were Linklaters and Cyril Amarchand Mangaldas.