Private equity firm GIP to raise Rs 2,500 crore via green bonds to refinance high cost loans

The company is exploring various options to raise funds, including engaging a partner for its 700-ME Vector Green renewable energy platform and full monetization of the platform. A banker has been appointed for this purpose, the sources said.

US private equity firm Global Infrastructure Partners (GIP) will issue green bonds worth Rs 2,500 crore in the Indian market over the next 12-18 months. The proceeds will be used to refinance its high cost exposure to renewable assets in Andhra Pradesh, Telangana and Punjab.

The company is exploring various options to raise funds, including engaging a partner for its 700-ME Vector Green renewable energy platform and full monetization of the platform. A banker has been appointed for this purpose, the sources said.

An additional 300 MW of capacity is added by the company in one year, and an additional 1,000 MW of wind-solar hybrid projects in three years.

GIP had raised Rs 1,237 crore in Indian markets in July last year via green bonds. The fund intends to cut its cost of borrowing by 200-250 basis points from 8.5% to 9% with the new issuance, the sources added.

The decision is also triggered by the recent order of the Andhra Pradesh High Court requiring discoms to honor the sanctity of power purchase agreements (PPAs). The order settled a two-year dispute between discoms and power producers over high rates for old projects that discoms wanted to renegotiate. Renewable capacity of over 4,000 MW has been underutilized in the state for two years.

“Proceeds from the green bond issuance will be used to refinance loans for 200MW renewable assets in PA, Telangana and Punjab,” a source said.

GIP, in July 2021, sold its road rig to KKR for around Rs 3,000 crore. KKR, the global investment company, has acquired GIP’s entire stake in the Highways 1 and 7 concessions, with a total highway length of 487 kilometers.

Going forward, the fund sees strong opportunities in power transmission, telecommunications towers, telecommunications fiber businesses, roads, ports and airports.

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