AEML raises USD 300 mn by issuing sustainability bonds

Adani Electricity Mumbai Ltd (AEML) on Friday said it has raised USD 300 million (around Rs 2,232 crore) by issuing 10-year sustainability-linked bonds to global investors. It has announced a USD 2 billion global medium-term notes programme and is the first company in India’s energy sector to undertake fundraising through this route, a company statement said. AEML priced its first takedown of USD 300 million through 10-year notes under the 144A / REG S format, the statement said adding it got the tightest coupon ever by a BBB- rated utilities issuer in Asia excluding Japan.

The proceeds will be utilised for refinance of existing debt and regulatory asset development for enabling ‘asset hardening’, the statement added. It said the takedown was oversubscribed 9.2 times, and also gave a geographical split of the investors which included Asia (49 per cent), Europe Middle East and Africa (27 per cent) and North America (24 per cent). After the transaction, AEML’s capital management plan enters the next phase with 100 per cent of the term debt being placed in the international capital markets and the overall maturity increases to nine years.

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The company, bought by the Adani Group from Anil Ambani-led Reliance Energy, services 12 million consumers in the financial capital. AEML has set for itself some of the nation’s most challenging renewable penetration targets in the short term, thereby showcasing our commitment towards net zero emissions. “We have also committed to the short-term target of reductions of Green House Gas (GHG) Emission intensity by 60 per cent from FY19 levels to stay in line with COP26 targets, its managing director and chief executive Kandarp Patel said.

The assurance of the sustainability framework for the issue was completed through external agencies, which included Moody’s Investors Service Vigeo Eiris providing a second party opinion on AEML’s Sustainability Framework and British Standards Institute assuring the baselines for the targets.