ACME Solar is in advanced talks with lenders such as REC, PFC, State Bank of India, and Middle Eastern banks to secure 4,000 crore in debt to fund green ammonia and green hydrogen projects in Tamil Nadu, India, and Oman.

According to two persons familiar with the situation, the talks have progressed and the loan is expected to be approved soon.

"Lenders are appraising the project to evaluate the risk profile and gain confidence in the concepts of green hydrogen and green ammonia," a bank source said. "Green hydrogen and green ammonia are novel concepts, and lenders will gain confidence once the risk is balanced."

For loans in the renewable energy sector, lenders are now charging interest rates ranging from 8.5% to 8.75%.

The project would be implemented in stages, with an initial budget of 4,000 crore. "If a large lender takes the entire exposure, they may subsequently sell a portion of it," the person stated. The loan would be used to fund projects in Tamil Nadu and Oman, with repayment terms aligned with the lifespan of the projects.

The Tamil Nadu project encompasses the establishment of a 5,000 MW solar PV plant, a 1.5 GW electrolyzer, and a 1.1 million tonne ammonia synthesis loop. ACME Solar has signed a land agreement to establish the green ammonia and green hydrogen facility in Oman, with plans for a $3.5 billion investment.