Azure Power refinances its 600 MW solar project

Azure Power Global Limited has said that it has refinanced its 600 MW solar power project – which is based in the state of Rajasthan – at the lowest rate of interest in its portfolio up to the present time.

The company statement says that it has successfully refinanced its existing project finance facility of Rs 2,350 crore ($313 million) utilised towards construction of its largest project – 600 MW Interstate Transmission System-connected solar project implemented by Azure Power Forty Three Pvt Ltd.

The solar project is already completed and as per the company statement this is the largest solar project that is owned and operated at a single location by a single developer. It was fully commissioned last year in December – barely two months ago from here. The massive solar park sells its produced electricity to Solar Energy Corporation of India (SECI) at a fixed tariff of INR 2.53 per kWh under a 25-year contract with the government entity.

Azure Power adds that the refinancing has been completed at a rate of interest of 7.2% per annum. This interest rate is fixed for 42 months and its the lowest rate of interest in terms of rupee financing for any project finance facility for Azure Power’s existing portfolio so far. It has been learnt that for this refinancing facility, L&T Finance Limited has acted as the sole underwriter.

Chief Financial Officer (CFO) Pawan Kumar Agrawal says that the refinancing of the original term loan was one of the highest priorities of the company even though the project was not commissioned.

“The facility will result in substantial savings in interest cost and will improve the project IRR significantly,” said Pawan Kumar.

He adds, “We are overwhelmed with the response we get from the credit markets which basically reflects lenders’ confidence in our strong corporate governance standards, operational capabilities, and credit fundamentals.”

Saur Energy had reported that Azure Power had signed a hybrid project of 400MW with the Israel major Eccopia. Azure Power is one of the key players in providing sustainable energy solutions and renewable power in India.