Adani Green Energy Raises $500 Million In Green Bond Issue

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One of India’s leading renewable energy developers has received a tremendous response to its green bond issue. The development is crucial as the Indian renewable energy market is facing financial strain.

Indian business daily Economic Times has reported that Adani Green Energy managed to raise US$500 million through dollar-denominated green bond issue. The instruments have been issued by three subsidiaries of Adani Green Energy which operate large-scale solar and wind energy projects across multiple states in India.

The green bonds will mature in a period of five and half years and were offered at a yield of 6.5%. Media reports quoting unnamed sources stated that the company received bids worth $1.5 billion. Investors included Eastspring, Harvest, Manulife, Payden, Lazard Masfi, and Morgan Stanley, with a third of the investors from the US. This high oversubscription could possibly have resulted in the reduction in yield to 6.25%.

The bonds shall be listed at the Singapore Exchange Securities Trading Ltd (SGX-ST) and India International Exchange (iFSC).

Adani Green Energy is among the largest renewable energy generators in India and owns the largest solar power project developed by a single developer in the country. The company has an operational capacity of just over 2 gigawatts and claims to be on track to achieve 4.5-gigawatt installed capacity by March 2021.

A number of renewable energy developers in India have taken to the green bonds route to raise debt funding. ReNew Power, Hero Future Energies, CLP India, and Azure Power are the other developers that have either raised one or more green bonds or are planning to do so in the near future.

The yield offered by Adani Green Energy in its green bond issue is just 25 basis points higher than the benchmark lending rate of the Reserve Bank of India (RBI). Had Adani Green Energy approached Indian banks to raise funds it would have been charged a very high interest rate due to the risks associated with the Indian power sector that has resulted in huge non-performing assets and uncertainty of timely payments to renewable energy developers by buyers.

Adani Green Energy requires a substantial amount of funds to ensure it installs the large-scale solar and wind energy projects it has secured in the recent auctions. Of the 12 wind energy auctions held in India, Adani has successfully participated in nine, the highest among all Indian developers. It managed to secure rights to develop 1.5 gigawatts of capacity in these auctions, or 12% of the allocated capacity. It is also the only renewable energy developer to have secured projects in the two national-level solar-wind hybrid auctions.

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An avid follower of latest developments in the Indian renewable energy sector.

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