ReNew Power to raise $575 million via green bonds

ReNew Power to raise $575 million via green bonds

MUMBAI: Goldman Sachs-backed ReNew Power is set to raise about $575 million by selling ESG (Environment, Social and Governance) compliant bonds to overseas investors this week – the second such offering in less than two months.

The leading renewable energy producer is likely to offer those papers with over seven-year maturity as the company aims to use the proceeds for refinancing existing rupee debt and partly capacity expansion, three people with direct knowledge of the matter told ET.

ReNew Power did not reply to ET’s query. Individual banks/investors could not be immediately contacted for comments.

HSBC, Barclays, JP Morgan are helping the company raise the offshore funds. “The issue may be launched Monday or Tuesday as the company appears to be in a hurry before US yields rise further,” said one of the persons involved in the exercise. The company is said to have obtained all required approvals.

EastSpring, Primus, JP Morgan Asset Management, PIMCO and China Life Franklin Asset Management are among the likely bidders. The US Treasury benchmark, a key gauge to price such bonds, has trebled to 1.67% now since August last year. It is still less than half of the October 2018 peak. ReNew may offer yields in the range of 3.90-4.25% this time compared to its earlier sale, which tracked the US benchmark yielding lower by about 45 basis points. Those bonds are likely to be rated in the high-yield category and would be raised through an offshore arm like India Green Power.

On February 8, the renewable energy company raised $460 million via the same route. Those papers initially offered 4.25% but were finally priced at 4 percent at the close of the deal amid higher investor demand. The bond sale obtained bids over 1.6 billion from global investors. India Green Power Holdings, an offshore arm, issued those debt securities. Those bond yielded 3.90 percent in the secondary market.

Currently, ReNew has nearly 10 gigawatts of operating and committed capacity and its project pipeline is massive, according to a company conference call note. ReNew’s current portfolio is split nearly evenly between solar and wind and is fully-contracted on terms of 25 years.

“Over the next two years, we expect to build a pipeline of an additional 8.5 to 9 gigawatts, resulting in a total of approximately 18 to 19 gigawatts of total capacity by the end of fiscal 2025,” said Sumant Sinha — chief executive officer, ReNew Power on February 24.

ReNew Power last week commissioned a 300 MW wind power generation facility in Gujarat. The project was previously awarded to ReNew’s operating subsidiary ReNew Wind Energy (AP2) in a competitive e-reverse auction.

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