Fitch Ratings has reaffirmed the BB- rating for Clean Renewable Power (Mauritius) Pte. Ltd.’s USD 363 million senior secured notes due in 2027, maintaining a stable outlook. The rating reflects the credit profile of a restricted group of renewable energy assets owned by Hero Future Energies, spanning solar and wind projects across India. The affirmation underscores the group’s operational stability, diversified off-taker base, and improving receivable collections, despite refinancing risks and exposure to weaker state utilities.
Key Highlights From Fitch’s Rating Action
- USD 363 million senior secured notes affirmed at BB-
- Outlook remains stable, indicating manageable credit risk under current conditions
- Notes are backed by a portfolio of eight renewable energy projects across three Indian states
- Total installed capacity of 505 megawatts, comprising 273 MW of solar and 232 MW of wind assets
- Off-takers include Solar Energy Corporation of India (SECI), state-owned utilities, and a third-party energy trader
Portfolio Composition And Operational Strength
1. Hero RG1 Renewable Assets
- The restricted group, referred to as Hero RG1, includes eight special purpose vehicles (SPVs)
- All projects are operational and supply electricity under long-term power purchase agreements
- SECI is contracted to buy 230 MW of capacity, providing payment stability due to its sovereign backing
- Exposure to multiple counterparties helps mitigate concentration risk and payment delays
2. Technology And Maintenance
- Fitch considers the deployed technologies proven and reliable, with midrange operational risk
- Short-term operations and maintenance contracts are in place, with scope for renewal or replacement
- Performance metrics across the portfolio remain within expected thresholds
3. Financial Structure And Refinancing Risk
- The notes follow a partially amortising structure, with refinancing required at maturity
- Fitch’s rating case assumes refinancing through long-term amortising debt
- Debt service coverage ratio (DSCR) averages 1.27x over the refinancing period, supporting the BB- rating
- Proceeds from the USD notes were used to subscribe to rupee-denominated external commercial borrowings issued by the SPVs
Credit Challenges And Mitigating Factors
- State-owned distribution companies (discoms) have historically shown weak credit profiles and delayed payments
- Introduction of late payment surcharge rules in 2022 has improved receivable collections from discoms
- Commercial and industrial customers show stronger payment discipline
- Fitch applies a higher merchant DSCR threshold to account for counterparty risk and cash flow variability
Strategic Ownership And ESG Considerations
- Clean Renewable Power is a wholly owned subsidiary of Hero Future Energies Asia Pte. Ltd.
- Hero Future Energies Private Limited, the operating entity, has 2.2 GW of installed capacity and 5.3 GW under development
- ESG initiatives include renewable-only generation, grid integration, and sustainability-linked financing
- The group’s long-term strategy focuses on expanding clean energy capacity across Asia and Africa
Market Position And Outlook
- The BB- rating places the notes in the speculative grade category, indicating elevated vulnerability to adverse conditions
- However, the stable outlook reflects sufficient financial flexibility and operational resilience
- Fitch expects continued improvement in receivable collections and refinancing visibility over the medium term
- The rating may be upgraded if refinancing risks are addressed and counterparty credit quality improves
Sources: Fitch Ratings, Economic Times Energy, NDTV Profit, Hero Future Energies Investor Disclosures
