ReNew, the Indian clean energy company, has announced that it has tied up with 12 international lenders, led by Rabobank, for a US$1bn loan – the largest External Commercial Borrowings (ECB) project finance loan in the country’s renewable sector, for any single project.

Solar energy in India

As ReNew rapidly builds its total portfolio, the US$1bn loan has been tied up through a special purpose vehicle and will be deployed for its hybrid Round-the-Clock (RTC) battery-enabled project, a statement said. It added that the interest rate, after hedging, is expected to be lower than the company’s current average cost of debt on its balance sheet.

The company has signed a PPA with the Solar Energy Corporation of Indian (SECI) for the project, which will see wind and solar farms set up across the Indian states of Karnataka, Rajasthan, and Maharashtra.

Clean energy growing in India

Speaking on the ECB loan, Sumant Sinha, Founder, Chairman and CEO, ReNew, said: "This loan—the single-largest project finance in India's renewable sector—highlights the interest of global lenders in ReNew as it helps spearhead India's historic clean energy shift and shows its continued ability to access financing at much lower rates than several years ago, despite the current volatility in the currency markets and a rising interest rate environment.

“This also shows the financial community's faith in our growth plans, innovation, project execution abilities, and sound monetary management. We will work harder to build on this much-valued trust."

Sinha added that the RTC project will supply power day and night and compete against the baseload of fossil-fuel energy providers, such as coal.

The loan comes in the wake of the April announcement that Mitsui & Co, a leading global general trading and investment firm, has partnered with ReNew for this RTC project, where it has taken a 49% stake.

The project will provide power to SECI at the rate of ₹2.90 per unit to begin with, which will increase 3% annually for 15 years and then stabilise for the remaining 10 years of the 25-year PPA, the company said.

This ECB loan follows ReNew's refinancing last month of its dollar-denominated bonds with domestic borrowings, becoming the first Indian renewable company to do so.