Indian Renewable Energy Development Agency (IREDA), the non-banking financial arm of the ministry of new and renewable energy, raised Green Masala Bonds worth Rs 700 crore from the domestic market in March this year, a company official said.
In addition, IREDA also plans to raise $ 350 million Green Masala Bonds at the Singapore stock exchange and the London stock exchange.
“In March we have already raised around Rs 700 crore from the domestic markets. This year we are planning to raise around $150 million Green Masala Bond either from the Singapore stock exchange or the London stock exchange. We are planning to list at both the exchanges but most probably we will go to Singapore only to raise the fund. We have taken in-principle approval from the Singapore stock exchange,” an official at IREDA said.
India has set a target to achieve 175 gigawatt (GW) of renewable power generation capacity by 2022 requiring $160 billion investment. “Going ahead, we are planning to float a $350 million Green Masala Bond programme. Out of that, we plan to raise around $150 million by September this year and raise the balance the year after,” the official added.
Experts say funding in the India renewable energy sector has improved over the past few years and sufficient appetite exists for debt funding of green energy projects in the country. “This is primarily due to stable policy and regulatory regime in the RE sector and the general slowdown in private investment in other sectors. Renewable energy companies are tapping into commercial banks, NBFCs, masala bonds, dollar denominated bonds, multilateral agencies and foreign institutions for their debt requirement,” said Debashish Mishra, Partner at consultancy firm Deloitte Touche Tohmatsu India.
He added that the recent low bids for the Rewa Ultra Mega Solar Project in Madhya Pradesh showed multiple factors are providing lenders comfort in taking exposure to the renewable energy sector. This includes a payment security mechanism and a bankable Power Purchase Agreement. India’s solar power sector saw record low-winning bids of Rs2.97 per kilowatt-hour (kWh) earlier this year to build 750 (MW) plant at Rewa in Madhya Pradesh (MP). The bids were called by Rewa Ultra Mega Power Ltd, a joint venture of Solar Energy Corp. of India Ltd (SECI) and MPUVNL.