Diversifies the funding pool to raise long-term funding
Team News Riveting
Ahmedabad, December 1
Adani Green Energy Ltd (AGEL), through its subsidiary Adani Solar Energy AP Six Private Ltd, has raised a yen-denominated facility to refinance its existing indebtedness.
The facility includes a ¥27.954 million (equivalent to about US$200 million) amortizing loan for a project valuing a 16-year debt structure with a door-to-door payment term of 10 years and an average term of more than 8 years. The loan facility for the project is supported by AGEL’s strong relationship with the two main relationship banks – MUFG Bank, Ltd and Sumitomo Mitsui Banking Corporation with equal participation.
The facility is also a testament to AGEL’s strong relationship with its core banking partners, creating an appetite for large scale and long-term maturity through the development of market instruments leveraging liquidity and expanding access to fundraising.
The facility is linked to the Tokyo Overnight Average Rate (TONA), a Japanese interest rate benchmark that yields close to zero, underscoring the attractiveness of expanding alternative capital pools providing relatively competitive interest rates. The company is committed to accessing long-term capital without depleting its growth capital and will continue to seek multiple alternative pools of capital to have a sustainable financing solution to spearhead India’s energy transition.
The refinancing facility is in line with AGEL’s strategy of securing long-term financing, establishing a debt structure in line with the underlying asset life for its operating assets. The facility follows the principles of investment grade credit benchmarks that have a life cycle leverage profile (measured by debt to EBITDA) of c. 3x covering the main tenor of the PPA.
“This is an excellent result for AGEL, which shows strong support from our lenders and demonstrates our ability to access bank debt on competitive terms in sync with the underlying asset development model to provide a long-term solution,” said Phuntsok Wangyal, Finance Director, Adani Green Energy Ltd. “The facility demonstrates AGEL’s proactive and consistent approach to accessing liquidity against a challenging interest rate environment in the wider markets, providing a long-term solution. With a lower reference rate, tighter margin and historically low swap rates, this provides significant flexibility and a competitively priced financing solution for AGEL’s high-quality portfolio of renewable assets.”
MUFG Bank, Ltd. and Sumitomo Mitsui Banking Corporation acted as lead lenders for the Facility. Latham & Watkins LLP and Cyril Amarchand Mangaldas acted as legal advisors on the transaction.
About Adani Green Energy Limited Adani Green Energy Limited (AGEL) is the renewable energy platform of the Adani Portfolio.
The company has one of the largest renewable portfolios in the world, with fixed growth of 20.4 GW in operating, under construction, commissioned and acquired assets serving investment grade counterparties. The company develops, builds, owns, operates and maintains grid-connected solar and wind farm projects.