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Bank of America Lends Rs. 800 Cr To ReNew Power’s Green Energy Project

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After a prolonged gap, Bank of America has contributed roughly Rs. 800 crores to finance the renewable energy lender, ReNew Power’s first domestic renewable energy project. 

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The financing arrangement is linked to two solar projects in India. The loan will be repaid with the proceeds from these two projects.

The five-year rupee-denominated green credit facility will assist the firm cut finance expenses by prepaying the existing offshore loan until its due date. This will further assist in lowering the cost of hedging currency risk in the face of global market volatility. 

ReNew Power’s head of corporate finance Kailash Vaswani said that this is a refinancing arrangement that would help us save roughly 200 basis points on borrowing. “With US Treasuries increasing, it’s preferable to raise funds domestically since we can avoid hedging costs.”

According to a local banker, onshore credit might be priced at 200-250 basis points for three-month Treasury bills, which returned 6.45% in the Reserve Bank of India’s most recent main auction.

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Given India’s goals to develop up to 500 GW of green electricity by 2030, Sanjay Agarwal, Head of India Corporates, Bank of America, said that this first renewable energy project finance credit will open the door for many more loans.

A $1.5 trillion worldwide goal has been established by the US-based lender for sustainable financing. According to Agarwal, one of the important markets helping to achieve this aim is India.

A loan can be converted into a bond before its maturity date. This makes more room for project funding for the firm that needs it the most due to rapid expansion.

ReNew Energy Global Plc recently said that it intends to reach net-zero carbon emissions by 2040. Through a thorough program of actions, the organization aims to attain the goal.

Previously, ReNew Power received long-term financing from the US International Development Finance Corporation.

Over the next two years, an estimated Rs 30,000 crore would be invested in boosting solar and wind-generating capacity.

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