JSW to raise Rs 2,200-crore loan to fund wind power project in TN

JSW Group is planning to raise Rs 2,200 crore through bank loans to fund a 450- megawatt (Mw) wind power unit in Tamil Nadu.

JSW Renew Energy Two (JRETL), a subsidiary of JSW Future Energy, setting up power plants at Tuticorin and Dharapuram in the state.

JSW Future Energy is owned by JSW Energy. The project is scheduled to be finished by March 31, 2023.

India Ratings has assigned “A-” to proposed bank loans. The rating is anchored by the presence of a fixed-tariff power sale contract with a reasonably strong counterparty Solar Energy Corporation of India (SECI), a 100 per cent government of India-owned entity.

The proposed term loan is repayable in over 70 structured quarterly installments, starting after 12 months from the completion or commissioning date, whichever is earlier. The interest rate on the term loan is floating, exposing the cash flows to interest rate risk.

The rating agency said the project carries moderate-to-low equity risk. The total equity requirement is pegged at Rs 731.25 crore. As of December 20, 2021, the sponsors had injected the requisite equity portion of Rs 158.93 crore. In line with the proposed term sheet, the sponsor will need to bring in an additional Rs 82.38 crore before the first debt disbursement. The rest equity portion will be infused in proportion to the proposed implementation schedule of the project.