ACME Solar is in discussions to raise Rs 4,000 crore in debt

23 Jun 2023 , 11:20 AM

With lenders like REC, PFC, State Bank of India, and banks from the Middle East, ACME Solar is in advanced talks to secure debt totalling Rs 4,000 crores to finance the green ammonia and green hydrogen projects in Tamil Nadu, India, and Oman.

News reports claim that the conversations have progressed and that the loan will likely be approved soon.

According to a report, ‘lenders are evaluating the project to assess the risk profile and gain confidence in the concepts of green hydrogen and green ammonia.’ Green hydrogen and green ammonia are novel concepts, and when the risk is balanced, lenders will gain trust.

Lenders currently charge interest rates for loans in the renewable energy sector that range from 8.5% to 8.75%.

The project would be carried out in stages, with an estimated starting budget of Rs. 4,000 crores. The report stated, ‘If a huge lender takes the entire exposure, they may later sell a portion of it. The loan would be used to fund the projects in Oman and Tamil Nadu, with the repayment period matching the length of the projects.

The Tamil Nadu project includes the construction of a 1.5 GW electrolyzer, a 1.1 million tonne ammonia synthesis loop, and a 5,000 MW solar PV facility. With plans for a $3.5 billion investment, ACME Solar has inked a land deal to build the green ammonia and green hydrogen factory in Oman.

Rajat Seksaria, CEO of ACME Group, stated to ET that pre-construction work for the Oman project has already started and that full-scale development of the first building is expected to start by April 2024.

In addition to having an agreement in Karnataka, ACME Solar is actively developing projects in Tamil Nadu, Odisha, and other states. The business is now buying land in Tamil Nadu with the intention of starting development on 2-3 projects by the end of March.

Currently, ACME has solar energy projects in 12 states with a capex commitment and investment of close to $8 billion. In the past, ACME has conducted business with a number of different companies, including Actis, Petronas, NIIF, Renew, BAML, Brookfield, Piramal, APG, and Allianz. Since 2020, ACME has expanded into the production of green ammonia and green hydrogen. According to the business’ website, ACME will open the first green hydrogen and green ammonia plant in Bikaner, Rajasthan, in 2021.

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