JSW Neo Energy Seeks $675 Million Loan For O2 Power Deal

India's JSW Neo Energy Ltd. is seeking a loan of about $675 million to back its purchase of renewable energy platform O2 Power from Sweden's EQT AB and Singapore's Temasek Holdings, according to people familiar with the matter.

Deutsche Bank AG and Mitsubishi UFJ Financial Group are the mandated lead arrangers and bookrunners of the five-year deal, said the people, who asked not to be identified discussing private matters. The loan is being syndicated to the broader market, they added, with investor meetings taking place in Dubai, Singapore and Taipei this week.

The loan will pay an interest margin of 170 basis points over the benchmark Secured Overnight Financing Rate, or SOFR, the people said.

JSW Neo Energy, a wholly owned subsidiary of JSW Energy Ltd., and Deutsche Bank both declined to comment. MUFG didn't immediately reply to a request seeking comment.

In December, JSW Energy agreed to buy O2 Power for $1.5 billion. The latter, a joint venture between EQT and Temasek, has a total capacity of 4.7 gigawatts.

The deal, which will help JSW achieve its target to reach 20 gigawatts of generation capacity by 2030, reflects the confidence of the Indian investors in the sector. Indian Prime Minister Narendra Modi is seeking to more than double the nation's clean power capacity by the end of the decade.

JSW Neo's borrowing comes at a busy time for debt markets in India, with foreign currency loans to local companies surging. Year-to-date volume has reached $10.7 billion, a 10% increase over the same period last year, according to Bloomberg-compiled data.

Last month, billionaire Mukesh Ambani-owned Reliance Industries obtained a $2.98 billion-equivalent loan, while real estate and construction conglomerate Shapoorji Pallonji Group signed a $3.4 billion private credit deal that marked the biggest of its kind in the country.