Reliance Industries (RIL) has secured a $736 million green loan to fund its largest foreign acquisition, REC Solar Holdings in Norway, adding to a growing list of Indian corporations that are turning to sustainable finance to fund ecologically beneficial initiatives. This is RIL’s first green credit, consisting of a $250 million six-year term loan, a $150 million working capital loan, and a $336 million five-year bank guarantee facility. The loan was drawn down on December 1, following which the purchase was completed and all outstanding liabilities at REC Solar were cleared.
RIL intends to deploy REC Solar’s technology in a fully integrated metallic silicon to V panel manufacturing giga factory in Jamnagar, Gujarat, which will start with a 4GW annual capacity and rise to 10GW over time. After REC Solar, RIL announced a stake purchase in Sterling & Wilson Solar, situated in Mumbai. RIL’s acquisitions and green financing are the first steps toward its objective of being a carbon-neutral corporation by 2035 and establishing India as a low-cost solar manufacturing hub.
REC Solar is a 25-year-old firm with three manufacturing plants: two in Norway for solar grade polysilicon production and one in Singapore for photovoltaic (PV) cells and modules production. In October 2021, RIL announced the acquisition of REC Solar from China National BlueStar for $771 million, including debt. The transaction was unusual in that it involved an Indian company purchasing assets from a Chinese vendor. The $736 million green loan is also an uncommon acquisition financing from RIL, which chose a term loan over a short-term bridging loan, as is typical in most M&A transactions.
