ReNew To Refinance Dollar-Denominated Bonds, First RE Player To Do So In India

India renewable energy major ReNew Energy Global has announced that it has successfully refinanced its 2024 maturity dollar-denominated bonds with amortizing project debt from an Indian non-bank financial company. ReNew claims to have become the first Indian renewable energy company to have done this.

The official statement of ReNew held that issued bonds worth $ 525 million in 2019, which were set to mature in 2024. By refinancing the dollar-denominated bonds ahead of time, ReNew said that it has shown strong and continued access to domestic debt capital, as well as an ability to proactively manage refinancing risk.

ReNew also said that the current refinancing has cut the bonds’ INR interest cost by 200 basis points, with the interest rate fixed for three years while pushing out the maturity to the end of fiscal year 2027. The rate reduction, rate fixing, and tenor extension have taken place against the backdrop of a rising interest rate environment in the broader markets. And the strengthening of the dollar, both heightened risk factors in this case.

The renewable energy company mentioned that this pre-emptive refinancing mitigates near-term refinancing risk for bonds and provides liquidity to bond investors.

Kedar Upadhye, Chief Financial Officer, ReNew, said, “In today’s business climate, being pro-active and flexible in one’s financing strategy is key, and our team has taken the lead in this by making us the first Indian renewable energy to raise money onshore to retire US dollar bond obligations.”

He further added, “As we help spearhead India’s energy transition, we have mitigated refinancing risk without depleting the company’s growth capital and will continue to look at multiple pools of capital to further abate refinancing risk.”

The company is one of the largest renewable energy independent power producers in India and globally and it develops, builds, owns, and operates utility-scale wind and solar energy projects, and hydro projects. At present, the current renewable energy portfolio of ReNew stands at 12.8 GW. It has risen drastically by 25 per cent from 10.2 GW at the beginning of 2022.