India’s renewable energy issuers with upcoming US dollar note maturities over the next 12 to 18 months face low refinancing risk under the baseline scenario of Fitch Ratings, supported by diversified funding access, predictable cash flows and long term power purchase agreements.
Fitch estimates that six US dollar note issuances totaling about $2.3 billion will mature over this period. These are evenly split between restricted group issuances rated under its Infrastructure and Project Finance Rating Criteria and holding company or SPV issuances rated under its Corporate Rating Criteria.
Bullet maturities but differing refinancing routes
All six notes are structured as bullet repayments. However, refinancing risk differs depending on the issuer structure.
Restricted group maturities are better insulated, as domestic banks and infrastructure financing institutions in India continue to provide long tenor funding at competitive rates. Recent onshore refinancings of US dollar notes at Greenko and Azure Power highlight continued domestic market access.
Onshore pricing remains competitive compared with US dollar coupons combined with hedging costs. Additionally, the Reserve Bank of India is expected to keep policy rates broadly steady through 2026, further supporting refinancing stability.
Holdco issuers more exposed to offshore markets
In contrast, holdco note maturities carry relatively higher exposure to offshore market conditions. Domestic lenders typically prefer asset level security and ring fenced cash flows at the project or operating company level, making onshore refinancing less attractive at the holdco level.
As a result, holdco issuers rely more heavily on the US dollar bond market and foreign financial institutions. This links refinancing risk to global investor sentiment, credit spreads and hedging costs.
External refinancing conditions are currently more favorable than when many of these bonds were originally issued. US dollar benchmark rates have declined, improving overall refinancing economics. Spreads remain tight and investor appetite for renewable energy credits is adequate.
For example, ReNew Private Limited refinanced its $525 million notes due July 2026 in January 2026 at a 6.5 percent coupon, compared with 7.95 percent on the maturing bond. The refinancing was completed with broadly unchanged terms and structure, underscoring continued access to offshore capital markets.
Downside risks and mitigation strategies
Fitch identifies sustained widening in US dollar spreads, higher hedging costs and a spike in global market volatility as key downside risks. Such conditions could narrow issuance windows and increase all in borrowing costs, particularly for holdco issuers dependent on offshore markets.
However, this is not the agency’s base case.
Issuers can mitigate execution risk by diversifying funding sources, including negotiated facilities from foreign banks and private credit providers. Greenko Energy, for instance, replaced its 2019 $435 million bonds with offshore yen loans in 2024 and US dollar loans in 2025, demonstrating alternative refinancing routes beyond public bond markets. With stable operating cash flows backed by long duration power purchase agreements and continued access to both domestic and international funding, India’s renewable energy issuers are positioned to manage upcoming US dollar bond maturities with limited refinancing stress under Fitch’s baseline scenario.
BABURAJAN KIZHAKEDATH
