Dua Associates Advises Odyssey on EUR 7 Million ECB Facility from BIO for Solar Projects

In a significant development for the renewable energy financing landscape in India, Dua Associates, a leading Indian law firm, has advised Odyssey Energy Solutions Procure VI Pvt. Ltd. (“Odyssey”) on securing a EUR 7 million external commercial borrowing (ECB) facility from the Belgian Investment Company for Developing Countries SA (“BIO”). This transaction underscores the growing importance of cross-border debt structures in funding distributed renewable energy projects and highlights the critical role of legal counsel in navigating complex regulatory frameworks.

The facility will enable Odyssey, a climate-tech and equipment marketplace company, to provide embedded credit solutions to engineering, procurement and construction (EPC) companies and solar developers. By easing access to equipment procurement financing, the transaction aims to accelerate solar power adoption among end-beneficiaries, thereby improving access to cleaner and more cost-effective electricity.

Transaction Overview

The ECB facility was structured as a direct loan from BIO to Odyssey, with the proceeds earmarked for on-lending to downstream solar project implementers. Dua Associates’ mandate encompassed advising Odyssey on the entire transaction lifecycle, including negotiation, finalization, and execution of the transaction documentation. The legal team was led by partners Nityashjit Kaur and Prateek Bedi, alongside senior associate Vaibhav Tripathi.

The deal required meticulous attention to the regulatory requirements governing ECBs under India’s foreign exchange management framework, including compliance with the Foreign Exchange Management Act (FEMA) and the Reserve Bank of India’s (RBI) Master Directions on ECBs. Given the end-use of funds—supporting equipment procurement by EPC contractors and developers—the transaction needed to align with the automatic route for ECB approvals and satisfy conditions related to all-in-cost ceilings, maturity periods, and hedging obligations.

Strategic Importance for Renewable Energy

Odyssey operates as an equipment marketplace that connects solar developers and EPC firms with suppliers, offering procurement solutions that bundle financing. The EUR 7 million injection will allow the company to scale its embedded credit model, reducing upfront capital burdens for small and mid-sized solar project developers. This is particularly relevant in India, where financing gaps often hinder the rapid deployment of rooftop and distributed solar installations.

BIO, a Belgian development finance institution, focuses on private sector investments in developing countries. Its participation in this ECB reflects a growing appetite among European development banks for Indian renewable energy assets. The transaction aligns with India’s ambitious target of 500 GW of non-fossil fuel capacity by 2030 and underscores the role of blended finance in bridging the viability gap for clean energy projects.

Legal Advisory Role and Structuring

From a legal perspective, the transaction presented several nuanced challenges. First, the ECB had to be structured to comply with the RBI’s end-use restrictions, which permit ECBs for working capital, capital expenditure, and on-lending to the infrastructure sector. Solar energy projects qualify as infrastructure, but the on-lending mechanism required careful drafting to ensure that the ultimate beneficiaries—EPC contractors and developers—fell within permissible categories.

Second, the cross-border nature of the loan necessitated coordination between Indian and Belgian legal regimes. The documentation addressed governing law, dispute resolution, and enforcement mechanisms. The law firm’s expertise in cross-border lending was critical in negotiating covenants, representations, and warranties that protected Odyssey’s interests while satisfying BIO’s internal credit policies.

Third, the transaction involved tax considerations, including withholding tax on interest payments under the India-Belgium Double Taxation Avoidance Agreement (DTAA). Dua Associates likely advised on obtaining lower withholding tax rates, minimizing the cost of borrowing for Odyssey.

Regulatory Landscape for ECB in India

India’s ECB framework has undergone significant liberalization in recent years. The RBI’s 2019 Master Directions consolidated the automatic and approval routes, raised all-in-cost ceilings, and expanded the list of eligible borrowers. For renewable energy companies, ECBs are an attractive alternative to domestic debt due to longer tenors and competitive interest rates.

However, compliance remains complex. Borrowers must ensure that the ECB is registered with the RBI through Form ECB-2, and that end-use restrictions are strictly observed. The transaction also required Odyssey to comply with the minimum average maturity period—typically three years for ECBs of this size under the automatic route. Additionally, hedging requirements for unhedged foreign currency exposure may have been triggered, depending on the borrower’s net worth.

Dua Associates’ advice would have covered these regulatory aspects, ensuring that the loan documentation included necessary representations and covenants to maintain compliance throughout the tenor.

Implications for Legal Practice

This transaction serves as a case study for law firms advising on cross-border debt facilities in the renewable energy sector. The demand for such expertise is expected to rise as India targets 500 GW of renewable capacity by 2030, requiring an estimated $200 billion in investment. ECBs from multilateral and bilateral development finance institutions will likely play a key role.

For legal practitioners, the deal highlights the importance of:

  • Regulatory familiarity : Deep knowledge of FEMA, RBI Master Directions, and sector-specific policies is essential.
  • Cross-jurisdictional coordination : Managing differences in legal systems, currency controls, and tax treaties.
  • Structuring flexibility : Adapting loan terms to suit the borrower’s business model—in this case, an equipment marketplace with an embedded credit model.
  • Due diligence : Verifying the eligibility of ultimate beneficiaries and end-use compliance.

Moreover, the involvement of a Belgian lender adds layers of complexity under the DTAA and Belgian regulatory requirements. Law firms must be prepared to navigate these nuances, often in collaboration with local counsel in the lender’s jurisdiction.

Conclusion

The EUR 7 million ECB facility advised by Dua Associates for Odyssey Energy Solutions represents a well-structured example of how legal expertise can facilitate capital flows into India’s renewable energy sector. By ensuring regulatory compliance, negotiating robust documentation, and addressing cross-border intricacies, the firm has enabled a transaction that promises to amplify solar energy access across India.

For legal professionals, this deal reinforces the growing intersection of finance, energy, and regulatory law. As more development finance institutions enter the Indian market, the demand for specialized legal advisory in ECB structuring will only intensify, making such transactions a benchmark for best practices in the field.