Whalesbook
Funding Talks Underway
Avaada Group is in advanced negotiations with foreign financial institutions to raise $700 million, approximately ₹6,500 crore, for a critical solar-wind hybrid project. Key participants in these discussions include established lenders like Standard Chartered and Sumitomo Mitsui Banking Corp (SMBC). Mitsubishi UFJ Financial Group (MUFG) and DBS Bank are also reportedly in the running to join this significant financing round.
Project Details & Loan Structure
The substantial 20-year project finance deal is designed to fund Avaada's solar-wind hybrid initiative, which was awarded by Sutlej Jal Vikas Nigam (SJVN). Terms are still being finalized, with a potential put option for the borrower at the five-year mark to offer repayment flexibility. This long-term financing reflects the project's nature as a long-gestation renewable energy development, crucial for meeting India's clean energy targets.
Past Financing & Risk Assessment
This deal follows Avaada's successful financing of a 300 MW project from Solar Energy Corporation of India (SECI) in late 2023, which secured ₹1,150 crore from MUFG, SMBC, and a European bank. While Avaada benefits from a robust order book and strong demand for its modules, credit rating agency ICRA has highlighted considerable execution and stabilization risks associated with the group's ambitious, debt-funded capacity expansion. ICRA noted that Avaada Energy Ltd's leverage is expected to remain high over the next two to three years, making its liquidity and debt servicing capabilities key monitorables.