Avaada Energy has replaced the debt on four operating solar farms in Rajasthan with a single loan of about $535 million from one lender. The four plants add up to roughly 1.7 GWp, and until April 2024 they were financed by several banks. Avaada's own explanation for the switch was a short phrase about "significant commercial improvements". It did not say what they were.
Key takeaways
- Avaada Energy secured a refinancing of $534.73 million from the National Bank for Financing Infrastructure and Development (NaBFID) for four operating solar projects in Rajasthan, India, announced on 18 April 2024.
- The Avaada refinancing covers four ISTS-connected solar projects in Rajasthan with a combined capacity of about 1,700 MWp and was structured under a Restricted Group model.
- CareEdge Ratings rated the Avaada Energy NaBFID refinancing 'AA (Stable)'.
- Avaada will use the NaBFID loan to prepay existing loans, giving several earlier lenders an exit, and says the new facility delivers significant commercial improvements over the facilities it replaces.
- The $534.73 million Avaada refinancing, about $0.31 million per MWp, is the largest of the 17 Indian solar debt financings Leap records between July 2023 and December 2024.
What does a Restricted Group structure change for a lender?
It changes what the lender is lending against. A Restricted Group pools several project companies into one ring-fenced borrowing unit, so the lender looks at their combined cash flows rather than at each plant on its own. A weak year at one site can be absorbed by the other three. Cash leaves the group only when agreed conditions are met.
That pooling is what makes a single lender possible. Four separate project loans need four sets of documents, four covenant packages and, in Avaada's case, several banks across them. One pooled facility needs one. The prepayment of the old loans, which Leap's record describes as a "successful exit for multiple lenders", is the mechanical consequence of moving from the first arrangement to the second.
It also helps explain the rating. Diversified cash flows across four plants are easier to underwrite than any one plant alone. CareEdge's 'AA (Stable)' rating attaches to the refinancing transaction itself, which is the point of the structure: the group borrows on a stronger credit than its parts.
Why refinance plants that are already running?
Because the risk the original lenders priced is gone. Construction loans carry the chance that a plant is late, over budget or underperforms in its first years. Once the four Rajasthan projects were operating and connected to the inter-state transmission system, known as ISTS, which links plants to the national grid rather than a single state's network, that risk had largely passed.
An operating portfolio with a track record can usually borrow on better terms than it did as a building site. Leap's record does not give the new interest rate or tenor, so the precise improvement is not public. What the record does say is that the refinancing achieves "significant commercial improvements over earlier facilities prepaid". That is Avaada's claim, and this post reports it rather than measures it.
The company frames the outcome in terms of stable long-term cash flows and improved financial health. A cheaper or longer facility on the same assets frees cash each year, and that cash can fund new projects. Avaada was raising for those too: Leap records a separate loan of about $38 million from Aseem Infrastructure Finance in May 2024 for a solar project still under development.
Who is NaBFID, and why does it matter here?
NaBFID is India's development finance institution for infrastructure lending. A single facility of this size, written against a pool of operating assets, fits its remit.
That matters for the shape of the deal. A commercial bank syndicate lending against operating solar will typically spread the exposure. A single development lender can take the whole ticket. Avaada's refinancing therefore says as much about the funding source as about the assets: a pool of large operating plants with a high rating is exactly the borrower a development bank is built for.
The size of the ticket is notable in its own market. Leap records 17 Indian solar debt financings announced between July 2023 and December 2024, and none is larger than Avaada's $534.73 million.
Enerdatics' data shows the Avaada refinancing works out at about $0.31 million per MWp across roughly 1,700 MWp. The two other refinancings of single operating solar plants in Leap's Indian sample sit higher on a per unit basis: Brookfield's roughly $153 million from Credit Agricole CIB for the 300 MW Abacus project in October 2024, and Azure Power's roughly $155 million from HSBC for a 300 MW project in August 2024, each about $0.51 to $0.52 million per MW. Construction loans cluster nearby: Adani Green's $400 million for 750 MW is about $0.53 million per MW, ENGIE's roughly $175 million for its 400 MW Surendranagar plant is about $0.44 million per MW, and BluPine Energy's roughly $52 million from SBI for the 120 MW Panshina project is about $0.43 million per MW. The comparison is not fully like for like. Avaada's capacity is quoted in MWp, a direct current rating, while the other projects are quoted in MW, so part of the gap reflects units rather than leverage.
What does the deal signal for Indian solar finance?
It signals that India's large solar developers are starting to manage debt at portfolio level. A developer with several operating plants in one state can group them, take them to a single lender with a rating attached, and replace a patchwork of project loans in one transaction. The Restricted Group structure is the tool that makes that possible.
It also shows that the refinancing market, not just the construction market, is where scale shows up. Rajasthan's operating solar fleet is already changing hands and being refinanced, as the sale of a 300 MW Rajasthan plant by ReNew to IndiGrid earlier in 2024 showed. Avaada chose to keep its plants and reprice the debt instead of selling them.
The open question is what the "significant commercial improvements" are worth. The new loan's pricing and tenor are not in the public record. Until they are, the comparison with other Indian refinancings rests on size and per MWp leverage, not on cost.
Frequently asked questions
How much did Avaada Energy raise from NaBFID? Avaada Energy secured $534.73 million from the National Bank for Financing Infrastructure and Development, announced on 18 April 2024, to refinance four operating solar projects in Rajasthan with a combined capacity of about 1,700 MWp.
What is a Restricted Group structure in the Avaada refinancing? The Restricted Group structure pools Avaada's four Rajasthan solar project companies into one ring-fenced borrower, so the lender relies on their combined cash flows. CareEdge Ratings rated the transaction 'AA (Stable)'.
How does the Avaada refinancing compare with other Indian solar loans? The Avaada loan, about $0.31 million per MWp, is the largest of 17 Indian solar debt financings Leap records from July 2023 to December 2024. Single-plant refinancings by Brookfield and Azure Power came in at about $0.51 to $0.52 million per MW.
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