NTPC Renewable Energy (NTPC REL) is raising a term loan of Rs 2,100 crore and will mobilize working capital of Rs 700 crore to finance projects. Its parent company NTPC has set itself the goal of achieving a renewable energy capacity of 32 Gw by 2030.
Debt financing for existing projects is ongoing, while equity would be injected by NTPC. The company has already received equity of Rs 300 crore out of the parent company’s total committed equity of Rs 4000 crore. NTPC REL would finance the projects at a debt-to-equity ratio of 4: 1.
NTPC REL is likely to borrow in domestic and international markets to minimize borrowing costs, India Ratings said.
The rating agency assigned an “AAA” rating to the proposed term loan, taking into account its strong operational and strategic links with its parent company. Gradually, given that it is unlikely that NTPC will undertake plans to create new thermal installations, any new capacity additions would take place in the renewable energy segment, with a majority of additions in the solar and wind fields. .
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