Green Power Play: Serentica Renewables Scores Rs 3,500 Crore Boost from ECBs

8 Jan 2024 , 10:47 AM

For their continuous renewable energy project in India, Serentica Renewables, a unit of the Vedanta Group and a developer of renewable energy with an emphasis on commercial and industrial (C&I), has raised a foreign currency loan of Rs 3,500 crore ($425 million).

The loan for Serentica has been arranged by a group of three foreign banks (Rabobank, MUFG Bank, Societe Generale) and three Indian lenders (YES Bank, Export-Import Bank of India, India Infrastructure Finance Company). For this lending facility, Rabobank was the only bank that served as the structuring bank. The ECB facility has a seven-year tenure and a 6.25% interest rate.

Serentica will be able to finance the development of its 530 MW hybrid renewable energy projects in Rajasthan and Maharashtra with the help of this contract. The projects combine solar and wind power.

‘This is the first dollar loan ever given to an Indian C&I project. There is a decent amount of depth in the local and foreign banks for debt and a good amount of depth in the stock markets for equity for high-quality platforms pursuing decarbonization,’ stated Pratik Agarwal, chairman of Serentica Renewables.

He stated that the C&I category in India represents a poorly supplied market with an electricity consumption of 3–4 lakh crore. ‘There were rather unhappy customers there. We think there is a great possibility if you can provide them with a high-quality, affordable, 24/7 green product, therefore that’s what we’re concentrating on.’

One of the biggest producers of zinc in India, Hindustan Zinc, would benefit from this project by receiving clean energy that will replace 24% of their coal-based power supply with firm dispatchable green power and drastically lower their carbon footprint.

This capital injection follows closely on the heals of a total debt raising of Rs 5,600 crore, of which Rs 3,000 crore came from REC Ltd and Rs 2,600 crore from Power Finance Corporation. The purpose of the capital raise was to fund the company’s hybrid renewable energy projects, which include the installation of 560 MW of solar and wind power in Karnataka.

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