ReNew gets $390 mn financing from ADB, LEAP

Proceeds from this loan will be utilised to develop and expand capacities by around 709 Mw

ReNew Power Ventures Private Limited, one of India's leading renewable energy development company, has secured long-term debt financing of $390 million from Asian Development Bank (ADB) and LEAP.

ADB itself will provide half of $390 million while the remaining will come from LEAP (Leading Asia's Private Sector Infrastructure Fund), a funding arrangement provided by Japan International Cooperation Agency (JICA) and administered by ADB, said Kailash Vaswani, Deputy CFO, ReNew Power.

The proceeds from this ADB investment will be utilised by the company for seven projects in Andhra Pradesh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh and Telangana.

The Goldman Sachs-supported ReNew Power plans to add 3,500 MW capacity every year till 2020 to maintain its share of 10 per cent green capacity by 2020. The company requires $10-12 billion funding of which equity would be $3 billion. There would be a requirement of $8-10 billion in debt funding over the next five years.

ADB had in 2014 put in $50 million as equity in the company. Besides Goldman Sachs that invested $385 million in equity, the company has funding from Abu Dhabi Investment Authority and Global Environment Fund.

Sumant Sinha, chairman and chief executive officer, ReNew Power Ventures Pvt. Ltd. said, "The additional debt financing from Asian Development Bank will help us retain our competitive advantage and also fast track the execution of our existing projects as well as add new growth capacities."

Vaswani said through this transaction the company has broad based its sources of debt financing. Part of the funds will be utilised for refinancing debt.

ADB loan has come at 9 per cent interest rate in rupee terms. The tenure will be 18 years for wind projects and 21 years for solar.

Commenting on the transaction, Michael Barrow, Director General, Private Sector Operations Department, Asian Development Bank said, "The company has shown tremendous growth over the last few years and we are pleased to provide further boost to help ReNew Power bridge the gap between India's current and growing energy needs and thus, making significant progress in lowering the country's carbon footprint."

ReNew Power is the first company in India to cross 1GW of commissioned wind energy capacity. ReNew also emerged as the largest winner in the auctions conducted by the Solar Energy Corporation of India (SECI), winning almost 10 percent of the total capacity of 500 MW rooftop projects. The company has won the mandate to install 5 MW of renewable energy capacity pan-India for the Indian Railways as well.

ReNew Power Ventures Pvt. Ltd, an Independent Power Producer (IPP), has over 3,000 MW of commissioned and under-construction wind and solar capacity across the states of Delhi, Gujarat, Haryana, Punjab, Madhya Pradesh, Rajasthan, Maharashtra, Karnataka, Telangana, Jharkhand, Uttar Pradesh, West Bengal, Tamil Nadu, Himachal Pradesh and Andhra Pradesh.