Adani Green Energy Raises $200 Million Via Japanese Yen-Denominated Refinancing Facility

AGEL has successfully completed the Japanese Yen-denominated refinancing facility raising USD 200 Mn equivalent

The refinancing facility is consistent with AGEL’s strategy of securing long-term financing establishing the debt structure in conformity with the underlying asset life for its operational assets. ( Image Source :Getty )

Ahmedabad: Adani Green Energy Ltd (AGEL), through its subsidiary Adani Solar Energy AP Six Private Ltd, has raised JPY denominated facility to refinance its existing indebtedness. The facility comprises JPY 27,954 million (c. USD 200 Mn equivalent) amortising project loan facility, assessing the 16 years debt structure with a door-to-door tenor of 10 years and an average tenor of more than 8 years. The project loan facility is supported by AGEL’s strong relationship with its two core relationship banks - MUFG Bank, Ltd and Sumitomo Mitsui Banking Corporation with equal participation. The facility is also a testament to AGEL’s strong relationship with its core banking partners creating the appetite for large size and long tenor through the development of market instruments tapping into liquidity and widening the access to fundraising. 

The facility is linked to Tokyo Overnight Average Rate (TONA), a Japanese benchmark rate gauge, which yields close to zero highlighting the appeal to broaden the alternative pools of capital providing relatively competitive interest rates. The company is committed to having access to long-term capital without depleting its growth capital and will continue to look at multiple alternative pools of capital to have a sustainable funding solution to spearhead India’s energy transition.

The refinancing facility is consistent with AGEL’s strategy of securing long-term financing establishing the debt structure in conformity with the underlying asset life for its operational assets. The facility follows the principles of investment grade credit metrices which have the life-cycle leverage profile (measured through Debt to EBITDA) of c. 3x covering the underlying PPA tenor.

“This is an excellent result for AGEL, showing strong support from our lenders and demonstrates our ability to access bank debt at competitive terms in sync with the underlying asset development model to provide a long-term solution,” said Mr Phuntsok Wangyal, CFO, Adani Green Energy Ltd.

“The facility demonstrates AGEL’s pro-active and continued approach to access liquidity against the backdrop of a challenging interest rate environment in the broader markets, providing the long-term solution. With lower benchmark rate, lesser margin and historically low swap rates, this provides significant flexibility and a competitively priced funding solution for AGEL’s high-grade renewable asset portfolio.” 

MUFG Bank, Ltd., and Sumitomo Mitsui Banking Corporation acted as principal lenders for the Facility. Latham & Watkins LLP and Cyril Amarchand Mangaldas acted as legal counsel for the transaction.