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Tata Power seeks $1 billion loan for clean energy initiatives

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In Short:

Tata Power Co., an Indian power generation firm, plans to raise up to $1 billion for clean energy projects through a local currency loan, potentially the largest in the country this year. The funds will support a $1.6 billion investment in clean energy projects, including pumped hydro storage. The loan, likely to be finalized in the next three to six months, aims to accelerate India’s growth in green power capacity.

Tata Power Plans to Raise $1 Billion for Clean Energy Projects

Exciting news alert! Tata Power Co., an Indian power generation firm, is gearing up to secure a whopping $1 billion for its clean energy initiatives. This move could mark the largest local currency loan in India for the year.

Talks with Top Lenders

The unit of Tata Group, a powerhouse conglomerate in India, is currently in discussions with key lenders for this substantial loan. The roster includes big names like State Bank of India, IndusInd Bank, Axis Bank, and ICICI Bank. Sources privy to the matter spilled the beans but wish to remain anonymous due to the confidential nature of the information.

In case you’re wondering, the largest local currency loan in India this year so far was Assam Bio Refinery Pvt.’s $365 million deal back in February. But if Tata Power successfully secures a loan close to $1 billion, it will snatch the title!

The funds from this loan will be channeled towards Tata Power’s $1.6 billion investment plan revealed in August. The focus is on developing clean energy projects, specifically in the realm of pumped hydro storage.

Pushing the Green Energy Agenda

India has set ambitious targets to significantly increase its green power capacity by 2030. Leading firms like Tata Power, Adani Green Energy Ltd., and Reliance Industries Ltd. are all stepping up their efforts in this space. Tata Power, in particular, has set its sights on expanding its renewable generation capacity by nearly fourfold by 2027.

The Nuts and Bolts of the Deal

The loan agreement could take the form of a bilateral loan or a clubbed facility. Tata Power is looking to finalize the credit lines with lenders within the next three to six months. Once everything is ironed out, disbursements will happen incrementally based on project progress. It’s worth mentioning that the loan terms may be tied to local benchmarks like the Reserve Bank of India’s repo rate or treasury bills.

As with any negotiation, details are subject to change. Stay tuned for more updates as the discussions unfold. And in case you’re wondering, Tata Power and the banks mentioned have chosen to remain tight-lipped for now.

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