Virescent Renewable Energy Trust raises 21.5 billion yen in debt financing



Virescent Renewable Energy Trust (VRET), a renewable energy infrastructure investment trust (InvIT) of KKR Virescent infrastructure, raised a total of 21.5 billion yen through listed non-convertible debentures and long-term debt financing.

VRET raised 10 billion yen (~ $ 134.41 million) on its first issue on 3, 5 and 7 year tranches. The proceeds will refinance existing debt at the level of special purpose vehicles (SPVs) and finance future acquisitions. Barclays Bank, Trust Investment Advisors, and ICICI Bank were the bookkeepers of the show.

VRET has tied up an additional 10 billion yen (approximately $ 134.41 million) in long-term funding from L&T financing to ensure full debt pegging of its short-term acquisition pipeline. VRET also benefited from a 1.5 billion yen (approximately $ 20.16 million) working capital facility of Tata Capital to improve its liquidity position and meet its credit rating requirements.

VRET stated that it had received an “AAA” rating for its loan facilities from CRISIL and India Ratings.

Financing at InvIT level involves a cash pooling mechanism and a cross guarantee of security, ensuring a cleaner capital structure. This benefits all lenders, investors and long-term financiers.

As of September of this year, VRET had raised 4.6 billion yen (about $ 62 million) from foreign and domestic investors. Alberta Investment Management Corporation (AIMCo), a Canadian-based institutional investment manager, led the round of funding.

Virescent Infrastructure had filed a draft placement memorandum with the Securities and Exchange Board of India and the National Stock Exchange of India to list its infrastructure investment trust (InvIT) on the Stock Exchange in July. The company plans to raise gross proceeds of 4.25 billion yen (approximately $ 57.12 million) through this listing for its solar assets in India.

In October 2020, KKR, a global investment firm, launched Virescent Infrastructure to acquire renewable energy assets in India. VRET’s initial portfolio includes nine operational solar projects with a total capacity of 395 MW. The projects are located in Maharashtra, Gujarat, Tamil Nadu, Rajasthan and Uttar Pradesh.

The company is also in talks with Focal Energy to acquire a 55 MW portfolio. In May, it acquired 76 MW of solar projects from the Singaporean company Renewable energy Sindicatum.

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