Delivering India’s First Round-the-Clock Renewable Energy Project

In Partnership with Bloomberg Media Studios

India wants non-fossil fuel power sources to provide half of its electricity supply by 2030. To achieve this target, the country which saw power consumption jump 48% in the decade to 2021, must massively scale up funding for renewables.¹

The country is one of the largest renewable energy markets in the world. Its rising power demand coupled with government support for clean power makes it one of the most attractive investment destinations for renewables among emerging markets.

India now needs to scale up its financing activities. According to BloombergNEF, the country needs $223 billion worth of investment in wind and solar capacity between 2022-2029 to reduce emission intensity by more than 45% by 2030 below 2005 levels.²

“India has proactively embarked on the process of formulating policies and regulations around climate change which is commendable,” says Niraj Mittal, MD & Country Head, Institutional Banking Group, DBS Bank India. “As an emerging market, there is also a need to retain flexibility & customize to suit India’s unique circumstances. The Government’s roadmap for a net-zero India can save lives, catalyze entire new industries, create millions of jobs, drive trillions of dollars of economic value and provide a significant heft to India’s role in the frontline of the global war on climate change.”

Already, India’s Independent Power Producers (IPPs) have secured loans from a wide variety of institutions, with international financiers lending 50% of the total amount tracked between 2019 to 2021.³
 

A New Approach to Renewables

Among those tapping into international financiers is ReNew Power (ReNew)—one of India’s largest IPPs with a total gross portfolio of around 12.8GW of renewable energy projects across the country.⁴

One of the biggest challenges that wind and solar projects face is that wind doesn’t always blow and the sun doesn’t shine at night. Without substantial power generation and storage, they fail to cover baseload power demand.

ReNew recently tapped a consortium of 12 international lenders to fund its 1,300MW hybrid Round-the-Clock (RTC) battery-enabled project that addresses challenges stemming from intermittency. Valued at $1 billion, it represents the single-largest project finance facility for single Indian renewable energy project.⁵

“RTC projects are important for India because power demand is accelerating very quickly,” says Kailash Vaswani, Head of Corporate Finance, ReNew Power. “Renewable energy is the cheapest form of new energy in the country. So, you can either meet demand with a conventional type of renewable energy project, which has low plant load factor, or you try to do these RTC type of bids that overcome that problem by bringing newer solutions to the renewable energy space.”

The RTC project will consist of three newly built wind farms and one solar-plus-battery-storage farm with up to 100 MWh storage capacity across the states of Rajasthan, Karnataka, and Maharashtra, and provide 400 MW electricity to SECI, an Indian central government-owned entity.⁶

“This is the largest renewable energy project in the country,” Vaswani adds. “We’re achieving an 80% plant load factor by constructing the project over multiple geographies, which have complimentary wind and solar radiation profiles. We’re also oversizing the project to help meet the tender requirements.”
 

Banking on Clean Power

DBS Bank India is among the lenders financing the RTC project, providing syndicated project finance facilities, FX hedging and LC facilities.

“Our partnership with Renew on the development of a Round-the-Clock renewable energy project is a demonstration of DBS’s commitment to provide capital for green and sustainable financing and aligns seamlessly with our lending and environmental objectives,” Mittal says. “DBS continues to work with players in Wind Energy, Solar Energy & Battery storage to help develop solutions for uninterrupted renewable power.

“For the upcoming project, DBS would be providing a full array of solutions for ReNew, including Lending, Hedging, Trade Issuances, Digitized Escrow solution for cash management, and would also act in the capacity of Authorized Dealer.”

The pace of annual wind and solar installations in India needs to grow fourfold to meet the nation’s 2030 goal.⁷  Banks like DBS will play a pivotal role in making that happen through the end of the decade and beyond.

“Going forward, we expect most of the bids to come out in this format, where renewable energy would be the predominant source of energy for projects that get done in the country to meet the increase in power demand of the nation,” Vaswani says. “The RTC project was our first with DBS. Clearly, they have a lot of appetite, and we’re the largest renewable energy company in India. So, I see this relationship growing in the future.”

1. BloombergNEF
2. BloombergNEF
3. BloombergNEF
4. ReNew Power
5. ReNew Power
6. ReNew Power
7. BloombergNEF