Reliance Power Secures ₹3,760 Cr Loan for Renewable Energy Expansion

Shares of Reliance Power Ltd garnered attention on Monday morning after the company disclosed to stock exchanges, BSE and NSE, that its subsidiary, Rosa Power Supply Company, had formalized definitive agreements on December 27. These agreements facilitate access to a rupee term loan of ₹3,760 crore from Power Finance Corporation Ltd (PFC), to be availed in multiple tranches, contingent on meeting standard pre-conditions.

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The Anil Ambani-led enterprise, which operates a power generation capacity of 5,300 megawatts, stated that the loan proceeds would support general corporate requirements, future investments in renewable energy projects, and flue gas desulfurization capital expenditure for Rosa.

"PFC neither holds shares in the company nor qualifies as a related party, promoter, or part of the Promoter Group/Group Companies. The borrowing arrangement with PFC is independent and conducted on an arm’s length basis," the company clarified.

In November, Rosa Power Supply Company preemptively repaid ₹485 crore to Singapore-based lender Varde Partners. This prepayment enabled Rosa to achieve a zero-debt status, settling ₹1,318 crore of outstanding obligations ahead of schedule.

Earlier in 2024, Reliance Power announced it had eliminated standalone bank debt and expressed plans to explore growth opportunities, particularly in the renewable energy sector, through its special purpose vehicles and subsidiaries.

To bolster long-term resources, strengthen net worth, improve financial health, and fund expansion efforts, the company proposed issuing new equity shares. This initiative, aimed at reducing existing debt and ensuring sustainable growth, included a preferential issuance of 46.2 crore equity shares worth ₹1,524.60 crore in October to Reliance Infrastructure Ltd, the promoter, and non-promoter entities like Authum Investment and Infrastructure Ltd and Sanatan Financial Advisory Services Private Ltd.

These strategic developments have propelled Reliance Power shares to an 81% increase in 2024 to date. Additionally, its subsidiary, Reliance NU Suntech, received a Letter of Award from Solar Energy Corporation of India (SECI) for a solar power project comprising 930 MW capacity and a 465 MW/1860 MWh Battery Energy Storage System (BESS). This project, marking the largest single-site deployment of grid storage batteries in Asia outside China, underscores the company's commitment to renewable energy advancements.