India’s NTPC Plans $250 Million Green Bond

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India’s largest power generation company may soon launch a green bond.

NTPC Limited (formerly National Thermal Power Corporation) is reportedly planning to launch a green bond as soon as next month. According to media reports, the size of the bond issue could be up to $250 million.

The issue will be company’s first after the government directed several public sector companies to raise funds by issuing green bonds last year. Media reports suggested that the company is looking to become the first Indian company to raise funds through a rupee-denominated green bond listed overseas.

Funds raised from the green bonds are expected to be used to finance several renewable energy projects already announced and planned by NTPC. The company has already made commitment to set up 1 GW wind energy and 10 GW solar power capacity across the country.

Recently, the company reported plans to revise its renewable energy capacity addition program to increase the share of clean energy in its portfolio. According to a senior executive, the new plan will be in line with the country’s aim of generating 175 GW renewable energy by 2022.

The company envisaged 128 GW of power generation by 2032 out of which 28% is expected to come from renewable energy. The company’s current power generation capacity stands at 47 GW of which renewable energy constitutes 11%.

Earlier this year, the government announced that several government-owned power sector companies are planning to launch green bonds. Indian companies planning rupee-denominated green bonds include Power Finance Corporation, Neyveli Lignite, PTC India, and Rural Electrification Corporation. The masala bonds (as rupee-denominated bonds are commonly referred) will be listed in the UK, possibly on the London Stock Exchange.

These bonds are likely to have small sizes of $150–200 million, and have tenors of 5 to 7 years.