Bridge to India has noted that there is liquidity crunch in India’s financial system, which has considerably increased the cost of debt finances
Azure Power, a leading Indian solar power producer, has raised over $400 million from equity and debt financings since June 30, 2018, despite the overall domestic photovoltaic (PV) sector is going through the hard times, according to a leading international agency.
However, the renewable energy consultancy firm Bridge to India has said that the overall solar sector in India is facing challenges to raise debt finances.
Indian solar power producer has raised over $400 million from debt and equity financings since June this year, including a fund of $185 million raised from the company’s first public follow-on offering on New York Stock Exchange (NYSE) that ended in October 10 this year and from various other debt financings projects and short-term debt facilities.
The company will use the financing to develop PV pipeline of over 2GW. This pipeline has a weighted average rate, nearly 17% more than the lowest solar bid in the country’s market, Azure said.
Liquidity crunch in financial system
The financing came in spite of a difficult scenario in the overall solar sector in India. Bridge to India has noted that there is liquidity crunch in India’s financial system, which has considerably increased the cost of debt finances by 1-1.5% in the last year.
In addition, the consultancy firm said that at present, non-banking finance companies (NBFCs) and private banks are not willing to finance the renewable energy projects in the country.
Smaller players to be affected
Such problems could continue for at least next 6-8 months. Smaller independent power producers (IPPs) and developers likely to be the worst affected players in the sector, the consultancy firm added.
Inderpreet Wadhwa, Founder, Chairman and CEO of Azure Power, said that the recent financings raised by the company were against a challenging economic scenario. However, this is a testament to the quality of assets that Azure is producing and the strength of solar platforms that the company has developed.
The company’s follow-on offering at NYSE attracted several investors such as International Finance Corporation Global Infrastructure Fund (IFC GIF), La Caisse de dépôt et placement du Québec (CDPQ) and International Finance Corporation (IFC).
Recently, Azure Power raised financing for its PV project of 200MW at Bhadla in Rajasthan.
