(Bloomberg) -- Indian power generation firm Tata Power Co. is planning to raise as much as $1 billion-equivalent for clean energy projects, in what could be the country's largest local currency loan this year.
The unit of Tata Group, one of India's largest conglomerates, is in talks with lenders including State Bank of India, IndusInd Bank, Axis Bank and ICICI Bank for the loan, people familiar with the matter said, asking not to be identified as the information is private.
India's largest local currency loan so for this year was Assam Bio Refinery Pvt.'s deal of $365 million in February. If Tata Power's planned borrowing finalizes with a size anywhere near $1 billion, it would take that title.
The proceeds of the loan will be used to fund the company's investment of $1.6 billion announced in August to develop some clean energy projects known as pumped hydro storage, the people familiar said.
India aims to nearly triple its green power capacity by the end of the decade and firms including Tata Power, Adani Green Energy Ltd. and Reliance Industries Ltd. are ramping up such efforts. Tata Power is targeting a near fourfold growth in its renewable generation capacity by 2027.
The deal may be a bilateral loan or a clubbed facility. The company expects to finalize credit lines with lenders in the next three to six months, after which disbursements will take place in tranches depending on project development, the people said. The loan may be priced over local gauges such as the Reserve Bank of India's repo rate or treasury bills, they added. Negotiations are ongoing and details of the deal may change.
Tata Power and the banks mentioned didn't respond to requests seeking comments.
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