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ACME Solar Secures ?2,300 Crore Loan from NaBFID to Refinance Dollar Bonds

ACME Solar Holdings has raised Rs 2,300 crore through a 15-year term loan from National Bank for Financing Infrastructure and Development. The funds will primarily be used to repay dollar-denominated bonds that are scheduled to mature later this year, according to sources familiar with the transaction.

The loan will be secured through a restricted group structure backed by revenues from 12 special purpose vehicles (SPVs) owned by the company. These SPVs operate solar power projects totaling around 450 MW and have long-term power purchase agreements (PPAs) with central government-backed entities such as Solar Energy Corporation of India. This arrangement ensures a steady revenue stream to service the loan.

In a restricted group (RG) structure, only selected subsidiaries or SPVs are responsible for meeting the loan covenants and repayment obligations. The framework enables the lender to clearly identify the specific entities and cash flows that will service the debt. If one SPV is unable to meet its obligations, other entities within the restricted group can step in to support repayment, providing additional security for the lender.

The loan has been priced between 8% and 8.5% interest. The refinancing is linked to bonds issued by India Cleantech Energy, a subsidiary of ACME Solar, which are due to mature later this year.

Back in August 2021, India Cleantech Energy issued $334 million in bonds with a coupon rate of 4.7%. The proceeds were used to subscribe to rupee-denominated non-convertible debentures (NCDs) issued by the 12 SPVs operating solar projects in India. At present, these dollar bonds are trading at a yield to maturity of around 6.24%, reflecting changes in market conditions since issuance.

The refinancing move is expected to strengthen ACME Solar’s balance sheet and optimize its debt structure, while ensuring continued financial support for its operational renewable energy assets.