ReNew Power Raises $352 Million

Indian renewable energy project developer ReNew Power has raised ₹22.35 billion (~$352 million) to be used for its expansion and loan-payment plans.

Confirming the development, a source at ReNew Power told Mercom that the details of this development will soon be made available on their website.

ReNew Power has raised the amount through Non-Convertible Debentures (NCD) which were issued in two parts.

The company raised ₹14.75 billion (~$232 million) through a multi-issuer cross-collateralized rupee bond. The bond involved various power Distribution Companies (DISCOMs) of states like Rajasthan, Gujarat, Andhra Pradesh and was spread over eight special purpose vehicles and 12 projects totaling 234 MW of installed capacity. This comprised 174 MW of wind capacity and 60 MW of solar.

L&T Financial Services acted as the underwriter for the issue.

The remaining ₹7.6 billion (~$120 million) was raised through a credit enhanced NCD and has a tenor of 17 years. The India Infrastructure Finance Company (IIFC) and the Indian Renewable Energy Development Agency (IREDA) extended a partial credit guarantee for the issue.

“We continue to broad-base our sources of debt and this NCD issue has saved interest cost between 1.5 and 2 per cent. This is expected to help in freeing up the existing bank limits and allowing us to contribute to working towards renewable energy targets set by states and the Centre,” PTI reported the company’s deputy CFO Kailash Vaswani as saying.

ReNew Power has a number of international investors. In November 2017, Mercom had reported on the Canada Pension Plan Investment Board’s (CPPIB) plans to invest approximately $200 million (~₹12.9 billion) in ReNew Power Ventures in the form of compulsory convertible preference shares (convertible debt) that will convert to equity shares at the time of initial public offering. Previously, ReNew has also received funds from the Asian Development Bank (ADB), Goldman Sachs, Japan’s JERA and the likes.

According to Mercom India Research, ReNew Power has installed solar capacity of 1,091 MW with another 100 MW under development and wind capacity of 1,260 MW.

According to Mercom’s India Solar Project Tracker, the average tariff of ReNew Power’s installed solar projects developed between 2011 – 2017 is approximately ₹5.75 (~$0.089)/kWh with the tariffs ranging between ₹8.5-₹4.4 (~$0.13 – $0.07)/kWh.

In December 2017, Mercom reported that Azure Power and ReNew Power won the bids in 250 MW Bhadla solar auction.

According to the recent 2017 Solar Funding and M&A Report, released by Mercom Capital Group, total global corporate funding into the solar sector, including venture capital/private equity (VC), debt financing, and public market financing raised came to $12.8 billion, a 41 percent increase compared to the $9.1 billion raised in 2016. Global VC investments came to $1.6 billion in 99 deals in 2017, up 30 percent from the $1.3 billion raised by 78 deals in 2016 – led by several large private equity deals in India.

Wendy PrabhuWendy is a co-founder of Mercom Capital Group, the parent company of Mercom India. Wendy is a contributing editor at MercomIndia.com and is responsible for content quality across the company and products. She has over 15 years of business and finance experience in the energy and technology markets. In addition to Mercom, Wendy has written for many other clean energy-focused blogs and publications.  More articles from Wendy Prabhu.