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NTPC to raise $1 billion via rupee, green bonds

According to reports, state-owned NTPC Ltd plans to raise $500 million each from its first global rupee and green bonds that it plans to sell soon.

The $1 billion bond sale, approved by the board of India’s largest power producer, ties in with the government’s aim of raising low-cost, long-term funds to help finance its renewable energy objectives.
The Reserve Bank of India in April allowed companies to sell rupee-denominated bonds overseas, a move that it said would help Indian borrowers raise debt abroad without taking on currency risks.
“The preparations are under way,” said a senior NTPC executive, requesting anonymity.
A company spokesperson, in an emailed response, added, “NTPC will approach the market to raise funds through foreign currency bonds in the current year.”
The low-cost funds will help cut the cost of clean power for the utility, which has an ambitious capital expenditure target of Rs.1.5 trillion for the five years to 31 March 2017. “The low-cost financing will help us lower tariffs and benefit consumers,” said the executive.
NTPC has an installed capacity of 44,598 megawatts (MW) and a 17% share in India’s power generation capacity of 267,637MW. It plans to set up 10,000MW of solar power projects and has called for bids to develop 1,250MW of solar projects in Andhra Pradesh, Rajasthan, Telangana and Madhya Pradesh. The utility’s green power plans involve renewable energy contributing 28% to its planned capacity of 128,000MW by 2032.
India needs as much as $200 billion to meet its target of 100 gigawatts of solar power capacity and 60,000MW of wind power capacity by 2022. Affordable and long-term funding continues to pose a challenge for developers of clean-energy projects in the country.
And green bonds are a good way of raising money. Cases in point being Yes Bank Ltd, which raised Rs.1,000 crore through its 10-year green infrastructure bonds, and Export-Import Bank of India, which raised $500 million in a dollar bond issue on 24 March.

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