Indian Companies Line Up Green Bonds Worth $1 Billion

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A number of government-owned companies in India are planning to launch green bonds to raise funds for various renewable energy projects across the country.

The Minister for Power, Coal and New & Renewable Energy recently announced that NTPC, Neyveli Lignite Corporation, Power Finance Corporation, Power Trading Corporation, and Rural Electrification Corporation are likely to float green bond issues worth $1 billion (INR 6,400 crore). This idea was first floated by the government in 2016.

These rupee-denominated bonds, also called Masala Bonds, will be listed on the London Stock Exchange. The tenor of these bonds is likely to be limited to a band of five to seven years and these are going to be in smaller denominations ranging from $150-250 million, the Ministry of Power stated in a press release.

India’s largest power generation company, NTPC Limited, is expected to issue bonds worth INR 2,000-3,000 crore ($310-467 million). The company had raised INR 2,000 crore ($310 million) from its first-ever green bonds issue on August 2016. The bond is listed at the London Stock Exchange and the Singapore Stock Exchange. The funds raised would likely be used for financing the several large-scale solar power projects NTPC is planning to develop across the country.

Power Finance Corporation may also issue green bonds similar in size to those of NTPC Limited. The company is expected to channel these funds to provide debt finance for power transmission projects linked to large-scale renewable energy projects.

Other Indian companies, like Power Grid Corporation, Indian Renewable Energy Development Agency, Solar Energy Corporation of India, and Energy Efficiency Services would likely raise a total of INR 1,000 crore ($155 million).

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An avid follower of latest developments in the Indian renewable energy sector.

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