New Delhi: Renew Energy Global Plc is set to raise up to $400 million through bonds, with the proceeds being used to refinance existing debt, invest in approved green projects and meet any additional requirements in line with the Green Bond Framework. Diamond II Ltd, a unit of Renew Energy, has hired Barclays, Deutsche Bank, HSBC, JP Morgan, Standard Chartered Bank and BNP Paribas as joint global coordinators for the sale of the bonds, which are backed by corporate guarantees and have been certified by the Climate Bond Initiative. The bonds are also in accordance with the International Capital Market Association’s Green Bond Principles, ensuring that the funds raised are used for environmentally sustainable projects.
The use of guaranteed bonds provides additional assurance to investors, as it ensures that in the event of an issuer’s default, a third party will meet the interest and principal payments. This arrangement enables the issuing company to pay lower interest rates than non-guaranteed bonds. During FY23, Renew Energy paid over $1 billion to its offshore bondholders. In the last financial year, the Nasdaq-listed firm refinanced $525 million of bonds in domestic markets ahead of March 2024 maturity, as well as repaid $300 million from its internal cash reserves.
Renew Energy has a clean energy portfolio of 13.4 gigawatts (GW) on a gross basis as of September 30, 2022, and plans to broaden its operations within the renewable energy sector. The company underwent a rebranding in February from ReNew Power to ReNew, reflecting its evolution from a pure-play renewables firm into an all-inclusive provider of clean energy, green hydrogen, energy storage and decarbonization solutions to the carbon markets.
Last month, the Canada Pension Plan Investment Board (CPPIB) agreed to buy Goldman Sachs’ stake in Renew Energy for $268.6 million, making the Canadian pension fund the majority shareholder in the company. Renew Energy also plans to sell minority stakes in its commercial and industrial projects for approximately $300 million as part of its capital recycling strategy.
The bond sale is part of Renew Energy’s ongoing efforts to reduce its debt and expand its renewable energy operations. The use of corporate guarantees and certification by the Climate Bond Initiative provides investors with confidence that their funds are being used for environmentally sustainable projects. As Renew Energy continues to broaden its operations and portfolio, the bond sale will help to fund the company’s growth and support its transition to becoming an all-inclusive provider of clean energy solutions.