ReNew Power Secures $450 Mn Funds Through Dollar Bonds

Continuing its streak of big investments, clean energy startup ReNew Power has raised $450 Mn funding through a dollar bond issuance.

ReNew Power is planning to use this funding to refinance its previous borrowing, which will be maturing next year. Moreover, $65 Mn of the funding will be used to meet its future capital requirements.

Simply put, a dollar bond is any bond or certificate issued outside the USA by any authorised foreign company, institution or government, which is denominated in US dollars instead of the local currency.

ReNew Power’s CFO D Muthukumaran told Mint that the company received an “encouraging” response from investors across the US and Europe. “The firm’s order book of 3x for such a long tenor paper and high participation from investors across the US and Europe is very encouraging and reflective of the company’s prospects and its healthy leverage levels,” he added.

The Mint report further said the bonds are priced at a coupon rate of 5.875% and will be issued in two tranches. Some of the bonds will get mature in five and a half years, whereas most of the bonds have a maturity period of seven years.

Founded in 2011 by Sumant Sinha, ReNew Power is an independent power producer (IPP) of renewable energy using clean sources such as wind and solar power. The company has the capacity to generate over 8 gigawatts of power assets across 16 states in India, including commissioned as well as under-development projects.

Since its launch, the company has emerged as India’s largest renewable energy producer in terms of total energy generation capacity. In the last three fiscal years, the company has also managed to double its operational capacity.

ReNew Energy bagged the fifth-biggest funding deal in 2019. The company raised $350 Mn from Goldman Sachs, Canada Pension Plan Investment Board (CPPIB) and Abu Dhabi Investment Authority (ADIA).

In a previous statement, ReNew Energy’s chairman and MD, Sumant Sinha, said that the rights issue in the massive round will enable its investors to “deepen their investment” in the company.

In 2019, ReNew Power had raised $435 Mn through dollar-denominated green bonds, along with a $350 Mn debt funding from Overseas Private Investment Corp (OPIC). Just like the current bonds raised, ReNew Power planned to use the funding to repay its debt obligations.