According to reports, CLP Holdings’ India arm, CLP India, has entered an arrangement with three lenders- Standard Chartered Bank, IDBI Bank Limited and IDFC- for financing its wind farms, the company said in a statement.
The energy company said that the ‘Pooled Financing’ arrangement is expected to boost the growth of CLP India’s wind portfolio and support the company’s commitment to adding 250 to 300 MW of wind projects every year.
“Pooled financing will help secure CLP India’s current and future assets and mitigate the inherent risk arising out of the unpredictable nature of wind projects’ output,” the company said in the statement.
The new financing model would help the company create a common pool of funds to finance projects and service debt, as against the current model where loans were extended to specific project and the debt repayment was linked to the cash flow from the specific project.
“With a number of existing challenges in the conventional power space, we are now seeing a much greater focus on renewable energy not only amongst private investors, but also amongst lenders, policy makers and State Governments. This new, innovative approach to financing our wind projects will strengthen our competitiveness and business performance in the Indian market and will aid the growth we have planned for the future,” Rajiv Mishra, Managing Director, CLP India, was quoted as saying in the statement.
Mr Abhay Rangnekar, Managing Director, Head – Project & Export Finance, South Asia, Standard Chartered Bank, said, “The pooling of cash flows from different projects will be viewed very favorably not just by the existing lenders but by new lenders, domestic as well as international. The pooling would also confer on CLP Wind Farms Ltd, a quasi-corporate risk profile, thereby, giving it access to diversified and cost-competitive funding sources in the future.”
CLP entered the Indian Power Sector in the year 2002 with the acquisition of a 655 mw gas fired power plant, which is located in Bharuch, Gujarat. It currently operates a total capacity of 3,000 mw. The company, which has decided to focus on renewable energy in India and put on hold thermal power plans, has an operational wind energy capacity of 1,000 mw.