Certainly one of India’s main solar energy venture builders – Azure Energy – managed to elevate $500 million via bond sale to abroad traders.
The proceeds from the bond sale shall be used to buy rupee-denominated debentures and loans of subsidiaries that instantly personal a number of solar energy tasks throughout India. The corporate has greater than 1,100 megawatts of solar energy capability underneath development.
The bond concern acquired great response as traders provided to place in round $1 billion towards the bond dimension of $500 million.
Azure Energy will provide a yield of simply over 5.5%. This can be a fairly engaging fee for worldwide traders however for Azure Energy this can be a significantly better deal. The yield it would pay is lower than even the first lending fee of the Reserve Financial institution of India. If Azure had raised these funds from Indian banks it could have needed to pay as a lot as twice as a lot.
That is maybe one of the crucial vital purpose for Indian personal sector renewable power builders to lift funds from worldwide markets via bonds. Indian banks are at the moment overexposed to the ability sector and several other thermal energy crops have change into non-performing belongings because of a number of causes together with, over-supplied market, elevated coal prices and competitors from renewable power.
Because of this, renewable power sector finds it troublesome to lift debt from Indian banks even when the latter are keen to offer funding. Solar energy builders are going through sector-specific points as properly. We reported in Could this yr that solar energy tariff bids in India have collapsed 26% in simply 3 months. This sharp correction and aggressive bidding by builders could also be making Indian lenders nervous as they may very well be apprehensive of economic sustainability of the tasks.
Just lately, one other India-based renewable power developer Greenko Power Holdings additionally raised $1 billion within the largest inexperienced bond in Asia. The corporate had acquired belongings from SunEdison India following chapter of latter’s American guardian.
Funds raised from the problem will serve a number of functions for Greenko. About half of funds shall be used to refinance a $500 million greenback bond concern floated by the corporate in 2014. Proceeds from the problem will even be used to retire debt it inherited together with the acquisition of SunEdison India’s belongings.
