Indian renewable energy company Adani Green Energy (AGEL) has secured $400m financing for its 750MW solar projects under construction in the Indian states of Rajasthan and Gujarat.
AGEL secured the financing from a consortium of five international banks, Cooperative Rabobank, DBS Bank, Intesa Sanpaolo, MUFG Bank, and Sumitomo Mitsui Banking Corp.
The first project is being developed in Rajasthan with 500MW capacity and has a long-term power purchase agreement (PPA) with the Solar Energy Corporation of India (SECI).
The second one is a standalone merchant power project with 250MW capacity, being implemented at the world’s largest renewable energy cluster at Khavda in Gujarat.
The projects are expected to begin commercial operation starting from November this year.
AGEL in its statement said: “With confidence in the evolving merchant energy market, AGEL is diversifying revenue streams, along with traditional PPAs, to enhance project revenue and position itself favourable for sustained value creation.
“Following AGEL’s lead, banks are becoming more comfortable with financing merchant projects with the transaction marking a sentiment shift in the international banking market.”
The financing, held under AGEL’s subsidiaries, has been certified as a ‘Green Loan’ by the second-party opinion provider Sustainable Fitch.
The $400m loan facility along with the funding solutions provides the syndicated guarantee-backed assurance programme, in line with the company’s procurement strategy.
AGEL said that the transaction enables a sustainable debt structure, developed as part of its capital management plan, for financing merchant exposure.
Also, the financing drives the industry’s transition to the next phase of market integration, supporting clean energy transition and decarbonisation in India’s renewable energy sector.
Sustainable Fitch highlighted the transparency of the 750MW Solar Projects green loan framework and its alignment with the four core components of the Green Loan Principles, 2023.
It advances India’s transition towards a lower carbon future while achieving UN Sustainable Development Goals (SDGs), especially SDG 7, said the renewable energy company.
Latham & Watkins and Saraf & Partners served as the borrower’s counsel, while Linklaters and Cyril Amarchand Mangaldas were the lenders’ counsel, for this transaction.
