With IFC as financier, Actis-backed Rewa unit achieves financial closure

Actis-backed Spring Energy has achieved financial closure for its 250-Mw unit of the Rewa ultra mega solar park in Madhya Pradesh. International Finance Corporation, a part of the World Bank Group, is investing $440 million, along with domestic lenders in the 750-Mw project.

Besides Spring Energy, the IFC would be extending debts to Mahindra Renewables and Acme, the two developers who are also putting 250 Mw each at Rewa. According to Shalabh Tandon, South Asia head, climate business and clean energy, IFC, the other two units would be reaching financial closure soon. The IFC is extending a debt of $45 million to each of the project developers besides arranging $100 million each from domestic lenders. “We have shown that low tariffs are financeable. This will set the template for the financial closure of other projects.”

The transaction with Actis has been signed for $140 million this week, while $150 million for Acme has been approved by the IFC.

The third, with Mahindra Renewables for $150 million, would be going to the board for approval.

The solar park is being developed by Rewa Ultra Mega Solar, a joint venture between Madhya Pradesh Urja Vikas Nigam, an agency of the state government, and the Solar Energy Corporation of India.

The Rewa investments and advisory bolster IFC’s role as a leading player in India’s renewable energy. It has made available more than $1 billion, including mobilisation, to this sector in India. In the last five years, IFC’s investee companies have set up more than 4 Gw of renewable energy capacity in the country, which comes to more than 15 per cent of the increased renewable energy capacity.

IFC has an investment in London-based Actis, a multiasset emerging market investor with $7.6 billion funds under management.

India aims to have 175 Gw renewable capacity by 2022. On February 2017, the three Rewa units were bid out by the Madhya Pradesh government to Mahindra Renewables, ACME Solar Holdings, and Solengeri Power’s Spring Energy at historic low tariffs that work out to ~2.97 a unit in the first year and ~3.32 over 25 years of the contract.

IFC is extending a debt of $45 mn to each of the developers, besides arranging $100 mn each from domestic lenders