ReNew Power Ventures has raised Rs 500 crore through issue of certified green bonds this month to finance its wind energy projects in Dhar and Ujjain districts of Madhya Pradesh. “The bond has been fully subscribed,” said Kailash Vaswani, deputy chief financial officer at the Gurgaon-based solar and wind energy major. The five-year bonds with a face value of Rs 10 lakh each have been rated A+ on a standalone basis. “It is not being listed but will come on ReNew Power Ventures’ balance sheet,” Vaswani said without disclosing the rate of interest. “We are not disclosing that at this point because we are currently in the process of improving our own credit,” he said.
ReNew Power, through a subsidiary, in September last year, too, had issued credit enhanced bonds partially guaranteed by India Infrastructure Finance Co worth Rs 451 crore in September 2015 to finance wind projects in Maharashtra. Vaswani insisted there was a crucial difference this time. “This issue has been certified by the Climate Bond Initiative,” he said. “The earlier bonds were not. Those at best could be called ‘climate bonds’, while these are green bonds.” Climate Bond Initiative is a London-based non-profit focused on mobilising funds for renewable energy projects across the world. It has formulated a globally accepted standard for bonds to qualify as ‘green bonds’ following investor concerns about the credibility – in particular, the end use of the funds raised – using bonds labelled ‘green’. The bond issuer has to get a registered verifier to examine the terms of the bond and ensure these conform to Climate Bond Initiative’s standards,following which the certification is issued.
ReNew Power has raised a total of $1.1 billion in debt to fund its projects. “We’re in any case raising debt from NBFCs and banks, but this is an effort to tap a new pool of capital altogether,” said Vaswani. “It was for the same reason that we did the credit enhanced bonds last year, to basically get access to a new set of investors.” Started in 2011 by Sumant Sinha, ReNew Power has over 3,000 MW of installed renewable capacity including 1,445 MW of wind power (1,000 MW commissioned and the rest under construction) and 1593 MW of solar energy (264 MW commissioned). It has raised $650 million from marquee private equity players including Goldman Sachs, Asian Development Bank and Abu Dhabi Investment Authority. The company also has plans to launch an initial public offering (IPO), possibly next year, but Vaswani refused to discuss the matter.