JSW intends to raise a loan of INR 2,200 crore for a 450-MW wind farm in Tamil Nadu.

JSW Renew Energy Two (JRETL), a subsidiary of JSW Future Energy, is setting up wind power plants at Tuticorin and Dharapuram in the state of Tamil Nadu. A schedule date of March 31, 2023 has been set for the completion of the project.

According to India Ratings, proposed bank loans have been graded “A-.”. The rating is based on a fixed-tariff power sale contract with a very reliable counter party Solar Energy Corporation of India (SECI), a 100 percent government-owned company.

The proposed term loan is repayable in 70 structured quarterly installments beginning after twelve months from the completion date or commissioning date, whichever is earliest. As the interest rate on the term loan is floating, cash flows are vulnerable to interest rate risk.

An equity risk rating of moderate to low was assigned to the project by the rating agency. Total equity requirements stand at INR 731.25 crore. By December 20, 2021, the sponsors had invested the required equity portion of INR 158.93 crore. 

Before the first debt disbursement occurs, the sponsor needs to raise an additional Rs 82.38 crore – in line with the proposed term sheet. Rest of the equity portion will be invested in proportion to the project’s proposed implementation schedule.

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