Adani Green Energy to Raise $5 Billion through Global Bonds 2023
The renewable energy division of the Adani Group, Adani Green Energy (AGEL), plans to finance around $5 billion through international bonds for its anticipated capacity expansion of additional 25 gigawatts (GW) by 2030.
The funds would be raised in instalments starting with this fiscal year and continuing over the following several years.
There are no plans to issue shares to raise money; only foreign bonds are used to do so. According to individuals familiar with the situation, the decision to raise funds through bonds was made since it is simple to get long-term financing at a reduced cost and has accelerated payment alternatives.
The corporation plans to launch roadshows in nations including the US, the UK, and Europe this fiscal year.
They added that shareholder and other approvals will be sought “as and when needed” to raise the cash in instalments.
The Gautam Adani-led firm now has 8,316 megawatts (8.3 GW) of operational renewable energy capacity, and another 12,118 MW is either almost complete or almost so. By 2030, AGEL wants to increase its total power from 20,434 MW to 45,000 MW (45 GW) to add at least 3 GW of solar and wind energy capacity annually.
Even though it has already placed several wind masts in Gujarat and Madhya Pradesh, the company is actively assessing other locations to put up facilities to create wind projects. The overall operating wind power capacity of AGEL is 1,201 MW.
The enormous French energy company TotalEnergies owns 19.7% of AGEL. Recently, Qatar Investment Authority (QIA) and US investment firm GQG Partners each acquired a 2.8% share in the business.
The Adani Group owed Rs 2.27 trillion in debt as of March 31, 2023, of which 39% were bonds, 29% were loans from foreign banks, and 32% were owed to Indian banks and NBFCs. The group’s assets have a gross value of Rs. 3.91 trillion.
India aims to construct 500 GW of non-fossil power production capacity by 2020. By 2070, the nation wants to attain net zero.
Adani Green Energy Ltd, one of India’s largest renewable energy companies, announced plans to raise $5 billion through global bonds in 2023.
The move aims to fuel the company’s ambitious growth strategy in the renewable energy sector. This article delves into the details of this major fundraising initiative, the implications for Adani Green and the broader renewable energy landscape.
Adani Green Energy, part of the diversified Adani Group, is India’s leading solar power producer. With a project portfolio spanning solar and wind energy projects, it has become one of the most significant players in the renewable energy space in India and is rapidly expanding its footprint globally.
Adani Green’s proposed $5 billion bond issuance will support its growth plans and consolidate its leading renewable energy player position.
The capital raised will finance new solar and wind projects, refinance existing debts, and invest in new technologies and innovation.
The bonds are expected to be issued in several tranches, with varying maturities and interest rates. They are likely to attract a diverse group of investors, including institutional buyers and retail investors, due to the strong backing of the Adani Group and the compelling growth story of Adani Green.
As renewable energy becomes increasingly attractive for investors, the bonds are expected to receive robust demand. Adani Green’s previous fundraising initiatives have garnered significant interest from global investors, indicating a high likelihood of successful bond issuance.
With the raised capital, Adani Green Energy is expected to expedite its project development timelines, moving closer to its goal of substantially increasing renewable energy capacity.
This massive capital influx is expected to bolster the company’s balance sheet significantly, allowing it to refinance existing debts at potentially lower rates and improve its credit rating, thereby lowering the cost of future capital.
The fundraising will likely facilitate Adani Green’s aggressive international expansion plans, enabling the company to acquire assets and enter into strategic partnerships in key global renewable energy markets.
Adani Green’s bond issuance, one of the largest in the renewable energy space, could set a precedent for other renewable energy companies in India and globally, showcasing the viability of large-scale fundraising through the bond market.
The issuance could be a high-profile endorsement for renewable energy investments, encouraging other corporations and investors to allocate capital to this increasingly vital sector.
As the world continues to shift towards cleaner energy sources, Adani Green’s bond issuance could exemplify how companies can leverage global capital markets to finance sustainable projects.
Adani Green’s ambitious fundraising comes with risks, including potential changes in government policies related to renewable energy, fluctuations in global interest rates affecting bond prices, and the overall health of the worldwide economy. The company’s ability to execute projects effectively and generate returns for bondholders will be crucial.
Adani Green Energy’s planned $5 billion global bond issuance in 2023 marks a significant milestone for the company and the broader renewable energy sector. It exemplifies investors’ growing confidence in renewable energy, and if successful, it may pave the way for similar capital-raising efforts by other companies in the industry. While the bond issuance does carry inherent risks, it represents a bold step forward for Adani Green in its quest to become a global leader in renewable energy.
