Adani Green Energy (AGEL), a part of the Adani Group dedicated to renewable energy, announced on Thursday that it has secured $400 million in funding. This significant financial boost comes from a consortium of five international banks: Cooperative Rabobank, DBS Bank, Intesa Sanpaolo, MUFG Bank, and Sumitomo Mitsui Banking Corporation.
The funds will support the construction of 750 MW solar power projects located in Rajasthan and Gujarat. The projects will begin operations in November. Specifically, a 500 MW project is under development in Rajasthan under a long-term power purchase agreement (PPA) with the Solar Energy Corporation of India (SECI). Additionally, a 250 MW standalone merchant power project is taking shape at Khavda, Gujarat, part of the world’s largest renewable energy (RE) cluster.
Adani Green Energy Limited (AGEL) Overview
Adani Green Energy Limited (AGEL) is a leading force in India’s renewable energy sector, part of the diversified Adani Group, one of India’s largest business conglomerates. Established with a mission to pioneer the development and sustainability of renewable energy in India, AGEL has grown to become one of the largest renewable companies in the country.
AGEL is committed to achieving the Adani Group’s vision of generating 25 gigawatts of renewable energy by 2025, aiming to become the largest solar power developer in the world. The company operates a vast portfolio of renewable energy sources including solar, wind, and hybrid energy projects across India. With a current operational capacity exceeding 10,000 MW, AGEL continues to contribute significantly to India’s renewable energy targets and reducing the nation’s carbon footprint.
Focused on leveraging state-of-the-art technologies, AGEL implements world-class project management techniques and innovative financial instruments to achieve operational excellence and cost-efficiency. The company’s projects reflect its commitment to sustainable energy generation that not only meets high environmental standards but also supports the socio-economic development of local communities.
Innovative Financial Structures
AGEL highlights that the $400 million construction facility not only provides necessary capital but also includes a syndicated guarantee-backed assurance program. This setup aligns with AGEL’s procurement strategy, ensuring a robust financial foundation for ongoing projects.
The company emphasized that this transaction is pivotal for establishing a sustainable debt structure within AGEL’s capital management plan. This approach is designed to support financing for merchant market exposure, a critical step for integrating the Indian renewable energy sector with global markets.
AGEL’s Expanding Portfolio
AGEL boasts an operational portfolio of 10,934 MW, which includes 7,393 MW from solar sources, 1,401 MW from wind, and 2,140 MW from wind-solar hybrid projects. The legal advisors for this transaction were Latham & Watkins LLP and Saraf & Partners for the borrower, with Linklaters and Cyril Amarchand Mangaldas advising the lenders.
Spotlight on Avaada Energy
Founded with a passion for accelerating the use of clean energy sources, Avaada Energy has been instrumental in developing solar, wind, and hybrid energy projects across the country.
The company aims to achieve significant scale, targeting an ambitious capacity of 11 GW in renewable energy projects over the next few years. Avaada’s commitment to sustainability is evident in their strategic implementation of projects that not only contribute to reducing carbon emissions but also enhance the socio-economic status of the regions in which they operate.
Avaada Energy is dedicated to delivering reliable and affordable clean energy solutions by employing innovative technologies and sustainable practices. Thus, this commitment positions Avaada as a key player in India’s renewable energy sector, helping to meet the country’s growing energy demands while supporting global environmental goals.
Avaada Energy’s Strategic Financing Move
On the same day, Avaada Energy, the renewable arm of Avaada Group, announced securing approximately Rs 1,190 crore in debt from the State Bank of India. This funding will facilitate the development of a 400 MWp utility-scale solar PV project in Surendra Nagar district, Gujarat. Gujarat Urja Vikas Nigam (GUVNL) will procure all the power generated from this project, which represents Avaada’s first venture into greenfield projects under a special purpose vehicle (SPV).
Enhancing Capital Structure
This strategic financial arrangement allows Avaada to optimize its capital structure and simplify the ownership across its project subsidiaries. It’s a move that showcases Avaada’s adeptness in managing and growing its renewable asset base.
The financing from SBI is structured as a 20-year project loan facility, secured under competitive terms, underscoring Avaada’s strong capabilities in project financing. Vineet Mittal, Chairman of Avaada Group, stated, “This partnership not only reflects our strategic vision to build a diverse and high-quality portfolio of energy transition assets but also highlights the trust and commitment of leading financial institutions to support renewable energy projects with stable, long-term cash flows.”
Also read: Yenmo’s Journey: Redefining Lending Dynamics in India
A Look Forward
In conclusion, both AGEL and Avaada Energy’s new financial ventures underscore the dynamic growth within India’s renewable energy sector. These developments are crucial as India continues to increase its capacity for green energy, striving to meet both national and international environmental goals.
