Structuring Term Loan Financing for a Greenfield Solar Power Project

A Corporate Finance Case Study — Loans & Debt Advisory

Client Snapshot

A newly incorporated special purpose vehicle, promoted jointly by multiple parties, set up to develop a greenfield 4 MW solar power project and seeking a term loan from a nationalised bank to fund it.

The Challenge

As a new entity with no operating track record, the SPV could offer collateral cover lesser than the loan value — well below what lenders typically expect. It also needed a moratorium period aligned to the construction timeline, and a competitive interest rate, all in a single sanction from a nationalised bank.

What We Did

• Structured the financing proposal around projected project cash flows and offtake visibility, to give the bank comfort beyond the collateral shortfall.
• Aligned the promoter group’s equity contribution and ownership structure into a form the bank’s credit committee could underwrite.
• Negotiated a moratorium period matched to the project’s construction and ramp-up schedule, so repayment only began once the plant was generating revenue.
• Benchmarked prevailing rates for comparable renewable energy financing and negotiated the final interest rate down from the bank’s opening terms.

The Outcome

We had four different promoters and almost little collateral to offer, and C&B still got the bank comfortable with the structure.

— Client