Suzlon Group has inked a formal agreement for working capital facilities with the state-owned REC Ltd.
Suzlon said in a statement on Tuesday that the cooperation would help the firm fulfill its working capital requirements, which are critical for completing its substantial current order book and possible future projects. The supplier of renewable energy solutions hopes that these facilities will speed operating operations and maximize the usage of its current capacity.
Suzlon Group, which has 14 manufacturing sites in India and has an outstanding 20.3 gigatonnes (GW) of wind energy capacity across 17 countries, is looking to extend its reach and efficiency.
The firm said that recent challenges in obtaining working cash had been a substantial impediment to ramping up operations and boosting its order book. This new financial arrangement is seen as a big relief and reflects Suzlon’s improved financial stability.
The Ministry of Power has administrative control over REC Ltd, which is classed as a ‘Maharatna’ firm. It specializes in delivering long-term financial solutions to different businesses in the country’s infrastructure industry, including loans.
Suzlon Group’s chief financial officer, Himanshu Mody, expressed excitement about continuing their cooperation with REC Ltd. He emphasized REC’s extensive knowledge in the electricity and renewable energy sectors, as well as its role in assisting Suzlon’s previous endeavors, such as debt refinancing, which assisted Suzlon in becoming debt-free.
“The current facility is not fund-based, and it will primarily be off-balance-sheet, allowing us to remain debt-free while significantly improving commercial terms with our customers and suppliers.” This mobile facility will enable the corporation to fulfill existing and future orders from its top clients,” Mody noted.
As a growing country with a rapidly rising economy, India has a high need for energy.
To meet this goal, the country must overcome various difficulties, including a lack of domestic energy supply, air pollution, and the obligation to reduce greenhouse gas emissions.
India may address these challenges by embracing renewable energy, which provides a local, safe, and dependable source of power.
Renewable energy has the benefit of being environmentally friendly since it emits no greenhouse gasses or other pollutants. This is especially important in India, where air pollution is a major problem, particularly in urban areas.
Renewable energy may improve air quality and public health while lowering the country’s dependence on fossil fuels, which are a major source of air pollution.
Furthermore, the country has high renewable energy objectives, including sourcing approximately 42% of its installed electrical capacity from renewable sources by 2030.
These investments have the potential to generate jobs and boost economic development, especially in rural regions where renewable energy installations are often situated.
