Key Takeaways
- KPI Green Energy plans to raise 32 billion rupees through a loan from the State Bank of India to enhance renewable power production.
- The company is also issuing its first green bond, aiming to generate 6.7 billion rupees with an 8.5% coupon rate.
- This financing effort aligns with India’s goal of achieving 500 gigawatts of non-fossil energy capacity by 2030.
Investment for Expansion
KPI Green Energy is set to secure 32 billion rupees (approximately $363.39 million) through a loan from the State Bank of India, the country’s largest lender. This financial move, disclosed by top KPI executives to Reuters, aims to expand production capacity at the company’s renewable energy facilities. The loan, characterized as one of the more significant deals in India’s solar and wind sector, is part of the Indian government’s broader initiative to reach 500 gigawatts of non-fossil energy by 2030.
The company’s renewable energy operations focus on solar, wind, and hybrid power solutions. The loan is structured as a 20-year agreement with an interest rate of 8.45%, to be disbursed in staggered payments over the next 1.5 years. Chief Financial Officer Salim Yahoo emphasized that the financing aligns with the company’s plans to complete ongoing projects in its Independent Power Producer (IPP) segment by 2027, which are expected to yield approximately 10 billion rupees in revenue.
Green Bond Issuance
In addition to the loan, KPI Green Energy announced its inaugural green bond on Tuesday, aiming to raise 6.7 billion rupees at a coupon rate of 8.5% per annum. This five-year, rupee-denominated bond has received an external credit enhancement, increasing its rating from A+ to AA+ by CRISIL and ICRA. The enhancement is primarily backed by a 65% guarantee from GuarantCo, part of the Private Infrastructure Development Group.
Without this guarantee, Chairman and Managing Director Dr. Faruk G. Patel indicated that the company would have faced coupon rates as high as 14-15% if it sought funds through equity or quasi-equity instruments. Aseem Infrastructure Finance largely subscribed to the bonds, with Jio Finance and SBI Capital Markets also participating. SBI Capital Markets served as the sole arranger for the bond issuance.
These funding efforts underscore KPI Green Energy’s commitment to enhancing its capabilities in the renewable sector, positioning the company as a critical player in India’s green energy landscape during a pivotal period of transformation.
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