New Delhi: A landmark financial move in India’s renewable energy sector is setting a new benchmark for green financing. Hero Future Energies (HFE), a key player in the clean energy space, has secured a ₹1,024 crore loan from the State Bank of India (SBI) for a 60 MW hybrid peak power project in Andhra Pradesh’s Kurnool district. Unlike a conventional solar farm, this project integrates solar and wind power with a battery storage system, ensuring a more reliable and consistent energy supply.
The loan, arranged through HFE’s subsidiary Clean Solar Power Barmer, carries a 21-year repayment period. This demonstrates SBI’s confidence in long-term investments in advanced renewable energy technology. Backed by a Power Purchase Agreement (PPA) with the government-owned Solar Energy Corporation of India (SECI), the project also assures the bank of guaranteed offtake for its electricity.
The Legal Framework for Green Finance
Financing such projects involves multiple legal layers. One critical aspect is the creation of a Special Purpose Vehicle (SPV)—in this case, Clean Solar Power Barmer. By isolating the project’s assets and income from HFE’s wider business operations, the SPV structure reduces risk for lenders. SBI’s loan is secured directly against the project rather than the parent company’s finances.
Legal agreements include the PPA with SECI, long-term contracts guaranteeing revenue, as well as charges over land, equipment, and pledged SPV shares. This framework ensures the bank retains enforceable rights if the project encounters difficulties. In addition, extensive legal due diligence ensures compliance with regulatory requirements ranging from environmental clearances to land use permissions.
A Shift in India’s Energy Landscape
This deal reflects more than just financing—it signals a structural shift in India’s renewable energy market. Traditionally, renewables were viewed as intermittent and unreliable. But the hybrid model with integrated battery storage allows steady power supply during peak hours, even when sunlight or wind is unavailable. This makes renewable energy a dependable contributor to the national grid.
For SBI, the project aligns with its broader green finance strategy. The bank aims to expand its green loan portfolio to 7.5–10% of total domestic advances by 2030. By funding ventures like HFE’s, SBI is not merely lending—it is directly advancing India’s net-zero pledge for 2070. Such partnerships between private developers and public sector banks are vital to accelerate India’s energy transition, demonstrating confidence in integrated renewable technologies and their role in powering a cleaner, more secure future.
