Mumbai: Adani Green Energy (AGEL) is set to raise about $600 million through overseas bonds to quicken the execution of renewable projects in the next two years, three people familiar with the matter told ET.
The proceeds will be used to fund capital expenditure amid signs of economic recovery and the company’s recent acquisition of SB Energy Holdings.
The proposed bond sale may be launched in the next two weeks. This will likely be backed by a global green bond agency, a first of its kind by the borrower.
Adani group did not respond to ET’s mailed query.
Adani Green recently took charge of two renewable projects of an estimated 1.7 GW capacity from SB Energy. Those projects are at an early stage and need to be developed in western Gujarat and Jodhpur, Rajasthan. All such projects are contracted to sell power under 25-year power purchase agreements (PPA) with sovereign-rated counterparties.
“A portion of bond proceeds will be used to develop those two projects,” one of the persons cited above told ET. There are other projects in the pipeline that will require funding.
The renewable energy arm of billionaire Gautam Adani’s conglomerate is said to have embarked on a mega capacity expansion plan. The proposed bonds may have maturities in the range of three to seven years. Initial pricing guidance is not yet fixed.
Barclays, MUFG, DBS Bank, Standard Chartered, and Mizuho are among investment bankers supposedly working on the deal. Individual banks could not be reached immediately for comments.
The company is aiming to build 9-GW operational assets by FY2022-23. Renewable projects of 200 MW were commissioned in the June quarter of this fiscal under the existing portfolio.
After SB Energy’s acquisition, operational capacity will increase to 5.4 GW from 3.5 GW.
“The money will be utilised for ordering equipment for solar projects, which are expensive,” said a senior executive involved in the exercise.
Adani Green bonds are expected to be rated BBB-, the lowest rank in the investment-grade category and in line with the country’s sovereign grade.
Adani Green Energy reported a nearly 10-fold jump in its consolidated net profit at ₹219 crore for the June quarter, compared to the year-ago period, aided by higher revenues.
The consolidated net profit of the firm was ₹22 crore in the quarter ended June 30, 2020, the company said in an exchange filing.
“AGEL’s growth continues to accelerate,” said Gautam Adani, chairman of the
group in a note last week when it announced its quarterly earnings. “The acquisition of SB Energy’s high-quality renewable energy portfolio has further consolidated our position as the world’s largest solar player…,” the chairman said.
AGEL added 925 MW operational capacity in FY21 beating the pandemic blues.