ReNew secures Rs 2,700 crore project loan from SBI

3 Aug 2023 , 10:09 AM

ReNew announced that it has secured a Rs 2,700 crore project loan from the State Bank of India for its 403 MW Peak Power Project. This indicates that local lenders who lost money by advancing large funds to power plants a decade ago are finally beginning to extend loans to them – but only to those with a strong equity component in the capital.

The loan has a term of 20 years with an interest rate ranging from 8.75% to 9.25%. Under the terms of the agreement, ReNew has stated that it will invest around Rs 313 crore ($38 million) for its 51% ownership in the project and will provide EPC, O&M, and project management services through affiliates.

Petronas’ sustainable energy business, Gentari, recently picked up a 49% stake in the project.

The company intends to refinance operational projects on a regular basis in order to lengthen repayment periods, expand borrowing limits, and minimize overall debt service costs.

ReNew has been refinancing dollar debt with domestic debt. ReNew refinanced $525 million in domestic markets during FY23, in addition to repaying $480 million in debt through internal cash flow generation.

ReNew raised $400 million at the holding company level in April carrying a 7.95% yield. The $325 million 5.375% bond issued by ReNew is due in April 2024. There are five additional bonds issued at the restricted group and hold levels that are due in FY27 and beyond.

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