$736 Million Green Loan Aids RIL’s Takeover Of REC Solar

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Reliance Industries Ltd (RIL) said that it had inked a $736 million-equivalent green loan to support its takeover of Norwegian solar panel producer REC Solar Holdings, establishing the Indian conglomerate’s first such financing.

Australia and New Zealand Banking Group (ANZ), DBS Bank, Credit Agricole, HSBC, and MUFG were among the bankers who participated in this green loan facility, which was signed on Nov 29.

A $250 million six-year term loan, a $150 million working capital credit, and a $460 million five-year bank guarantee facility comprise the lending at an interest margin of around 120bps–125bps over Libor.

The loan was obtained by Singapore-based REC Solar and is secured through guarantees from Reliance New Energy Solar, a fully owned subsidiary of Reliance Industries.

The credit was drawn down on December 1, following which all outstanding liabilities at REC Solar were cleared, and the transaction was finalized, according to RIL.

Reliance inked the formal deal to acquire REC Solar for $771 million from its owners, China National Bluestar (Group) Co Ltd, on 10 October. 

On the same day, Reliance declared the procurement of a 40% share in SP Group company, Sterling and Wilson Solar.

RIL said in June that it will invest Rs. 75,000 crores in its sustainable energy drive over three years, using internal accruals. The company’s goal is to achieve net-zero carbon emissions by 2035.

Reliance intends to invest Rs. 60,000 crore in four factories in Jamnagar to manufacture energy storage batteries, fuel cells, solar cells and modules, and green hydrogen. One of the four plants will manufacture solar photovoltaic (PV) modules.

REC Solar has 3 facilities: 2 established in Norway for the production of solar-grade polysilicon and one in Singapore for the manufacturing of photovoltaic (PV) cell modules.

RIL intends to deploy REC Solar’s industry-leading technology in a fully integrated, metallic silicon to PV panel manufacturing facility in Jamnagar’s Dhirubhai Ambani Green Energy Giga Complex, first with 4GW per annum capacity and ultimately turning to 10GW per year capacity.

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