Tata Power, part Indian conglomerate Tata Group, is seeking to secure a loan of up to $1bn to finance its clean energy projects, Bloomberg has reported citing sources.

This move could result in the largest local currency loan in India for the current year.

The company is currently negotiating with several lenders, including the State Bank of India, IndusInd Bank, Axis Bank, and ICICI Bank.

The loan is intended to support Tata Power's $1.6bn investment, announced in August, to develop pumped hydro storage projects in the state of Maharashtra.

The structure of the loan could be either a bilateral agreement or a syndicated facility, th report said.

Tata Power anticipates finalising the credit arrangements within the next three to six months.

The funds will be disbursed in stages, aligned with the progress of the project development.

Pricing for the loan may be set above benchmarks such as the Reserve Bank of India's repo rate or treasury bills.

As discussions are still in progress, the specifics of the loan agreement are subject to change.

India has an ambition is to nearly triple its renewable energy capacity by the end of this decade.

Companies like Tata Power, Adani Green Energy, and Reliance Industries are actively increasing their renewable energy efforts.

Tata Power itself aims to expand its renewable generation capacity by nearly four times by 2027.

Earlier this year, Tata Power Renewable Energy Ltd (TPREL), a subsidiary of Tata Power, signed a Memorandum of Understanding with the Government of Gujarat.

This agreement, established during the Vibrant Gujarat summit, outlines the construction of 10GW of renewable energy projects in the state.

The planned projects, covering an area of 50,000 acres (20,234 ha) of unencumbered government land, will encompass solar, wind, and other forms of renewable energy.

With an investment potential of Rs700bn ($9.4bn), these projects are expected to generate employment for 3,000 individuals.