Gurugram-based clean energy company ReNew Power has tied up with 12 international lenders, led by Rabobank, for the largest external commercial borrowings (ECB) project finance loan in the country's renewable sector for any single project.

The consortium of 12 international lenders includes seven first-time project lenders to ReNew Power, the company says in a statement.

The $1-billion loan has been tied up through a special purpose vehicle and will be deployed for the company's hybrid round-the-clock (RTC) battery-enabled project.

The interest rate, after hedging, is expected to be lower than the company’s current average cost of debt on its balance sheet, the renewable energy firm claims.

ReNew has signed a power purchase agreement (PPA) with the Solar Energy Corporation of India (SECI) for this project, which will see wind and solar farms set up across Karnataka, Rajasthan, and Maharashtra states.

"This loan—the single-largest project finance in India's renewable sector—highlights the interest of global lenders in ReNew as it helps spearhead India's historic clean energy shift and shows its continued ability to access financing at much lower rates than several years ago, despite the current volatility in the currency markets and a rising interest rate environment," says Sumant Sinha, founder, chairman and CEO, ReNew.

"This also shows the financial community's faith in our growth plans, innovation, project execution abilities, and sound monetary management," he adds.

The round-the-clock project will supply power day and night and compete against the baseload of fossil-fuel energy providers, such as coal, the company says.

While solar projects connected to the grid are dependent on the availability of sun and storing energy is an issue, hybrid solar systems provide power continuously without any interruption, as the batteries connected to them can store the energy. Experts say excess energy produced during sunny days can be stored in hybrids, apart from advantages like low maintenance cost, high efficiency, better load management, etc.

In April, Mitsui & Co., Ltd., a leading global general trading and investment firm, partnered with ReNew for this RTC project, where it took a 49% stake.

The project will provide power to SECI at the rate of ₹2.90 per unit to begin with, which will increase 3% annually for 15 years and then stabilise for the remaining 10 years of the 25-year PPA.

This ECB loan follows ReNew’s refinancing last month of its dollar-denominated bonds with domestic borrowings, becoming the first Indian renewable company to do so.

India's renewable energy capacity addition plans of 500 gigawatt (GW) by 2030 are moving to the next level, with many hybrid solar-wind combined projects taking off. The country has already developed about 1.3 GW of wind solar hybrid and another 11GW are either in planning or implementation stage, Fortune India reported earlier this month.

In February, ReNew Power had set up Gujarat’s first wind-solar hybrid project at the Chlor-Alkali unit of Grasim Industries in Vilayat in Bharuch.

ReNew Power loan

ReNew Power secures $1 billion loan from 12 global lenders