Bank of America gives ReNew Power Rs 800 crore loan

9 Nov 2022 , 08:50 AM

In its first local project financing agreement in the renewable energy industry after a protracted absence, Bank of America has provided ReNew Power with an approximate Rs800 crore loan.

The company will benefit from cheaper borrowing costs thanks to the five-year rupee green loan facility because the money will mostly be used to pay off an existing offshore loan ahead of time.

According to news reports, the onshore loan could have a spread of 200—250 basis points above three-month Treasury Bills, which had a yield of 6.45% in the most recent primary auction of the Reserve Bank of India.

The loan will assist in reducing costs for managing currency risk in the face of volatile global markets. Two specific solar projects in India are connected to the credit line. These two projects’ cash flows will be used to pay back the loan.

As the loan nears its planned maturity date, it may be converted into a bond. This makes it possible for a corporation that is currently on an expansion drive to receive extra project financing.

By 2040, ReNew Energy Global Plc said it hoped to have net-zero carbon emissions. Through a thorough program of actions, the organization hopes to reach its goal.

At their subsidiary level in August, Bank of America assisted Tata Power in raising two sustainability-linked loans (SLL) totalling $320 million. These loans totalled $125 million for a bilateral loan and $75 million for a club loan.

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