Greenko Energy Holdings, which is supported by the large sovereign funds GIC and ADIA, has managed to raise ₹4,800 crore from the National Bank for Financing Infrastructure and Development (NaBFID). This long-term borrowing is specifically planned to refinance the high-cost US dollar green bonds that are set to mature in the coming months.
Strategic Refinancing and Restricted Group Structure
The funds were raised through a project finance loan facility provided to 38 special purpose vehicles (SPVs) in a “restricted group” (RG) structure. This particular structure enables the lender to secure the loan repayment through the combined cash flows of the entities included in the group. The SPVs have a strong renewable energy portfolio of about 1 GW, including solar, wind, and hydro projects with long-term Power Purchase Agreements (PPAs) in place with discoms and industrial consumers.
According to a person familiar with the transaction:
“The amount raised will be used to redeem the US dollar bonds raised by the holding company in 2021.”
Specifically, the proceeds will facilitate the redemption of $940 million in green bonds issued by Greenko Dutch B.V. in March 2021. Any remaining balance for the redemption will be covered through the company’s internal cash flows.
Long-Term Debt Tenure and Cost of Capital
The fresh funding from NaBFID is a ultra-long-term commitment, carrying a tenure of more than 25 years. Industry sources indicate that the interest rate for this loan is positioned between 8% and 8.50%. This shift from international bond markets to domestic project finance underscores Greenko’s strategy to mitigate currency risk and secure stable, long-term financing.
Current Capacity and Operational Outlook
Greenko currently boasts a net installed capacity of 11 GW across 20 Indian states and is a pioneer in integrated renewable energy storage projects in Andhra Pradesh, Madhya Pradesh, and Karnataka.
Despite recent ratings pressure from agencies like Fitch which cited delays in the Teesta III hydro project and pumped hydro storage starts the company continues to enjoy strong strategic oversight from its majority shareholder, GIC. The Singaporean sovereign fund holds four board seats and maintains a commitment to fund 25% of costs for under-construction projects through equity injections.
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