Business
Greenko Energy raises Rs 4,800 crore from NaBFID
“The money has been raised through a long-term loan to 38 special purpose vehicles (SPVs) of company under a restricted group structure,” said a person aware of the deals. “The SPVs have aggregate renewable energy capacity of about 1 GW, comprising solar, wind and hydro, and have long-term power purchase agreements with discoms and commercial and industrial customers. The amount raised will be used to redeem the US dollar bonds raised by the holding company in 2021.”
A restricted group (RG) structure in a loan agreement defines which subsidiaries or SPVs of a company will comply with the covenants and guarantees for the loan. The structure allows the lending company to identify which entities and cash flows will service the debt. If any of the entities fail to meet their part of the payments, the SPVs in the group can step in, thus giving the lender comfort of repayment.
The loan from NaBFID was likely disbursed earlier this month and Greenko is expected to use the proceeds to redeem its dollar bonds as early as this week.
In March 2021, Greenko Dutch B.V, an overseas subsidiary, had issued $940 million in green bonds. These bonds are up for maturity this year.
“The fresh funding from NaBFID will be used to part finance the bond redemption with any extra amount if needed to be arranged from internal cash flows. This is a project finance loan with a tenure of more than 25 years,” said the person cited above.
Greenko is paying an interest rate of between 8% and 8.50% on this loan. ET could not ascertain the exact interest rate. Emails sent to Greenko and NaBFID did not elicit a response till press time. Greenko has a net installed capacity of 11 GW across 20 states in India. The company also initiated integrated renewable energy storage projects in Andhra Pradesh, Madhya Pradesh and Karnataka.
Last month, ratings agency Fitch downgraded Greenko’s long-term foreign-currency issuer rating to ‘BB-‘ from ‘BB’ citing delays in both the restoration of its Teesta III hydro project as well as the operational start of the 480MW capacity of its first pumped hydro storage (PSP) project. “We believe these delays from Greenko’s earlier targets reflect the lack of adequate risk assessment, resulting in weaker metrics that are more aligned with a ‘BB-‘ rating,” Fitch said.
The ratings agency has listed weak project execution and financial matrix and high committed capex among the key rating drivers for the company. But Greenko benefits from financial support and strategic oversight from 58% owner GIC, which holds four out of 13 board seats. “GIC approves investment plans, oversees operations and manages risks. Greenko’s capex and investment plans, including for the under-construction PSPs, are backed by the shareholder’s commitment to inject equity to fund 25% of the costs,” the ratings agency said.
