NTPC Raised Rs. 2,000 Crore by Green Masala Bonds

NTPC Ltd. has raised Rs. 2,000 crore through issuance of green masala bonds in overseas market under its USD 4 billion medium term note programme.

The proceeds of these bonds will be used for financing renewable energy projects in accordance with applicable guidelines and regulations of Reserve Bank of India (RBI).

The details of the green masala bonds are given under:

Size of the Issue INR 2,000 crore
Date of Issue 10.08.2016
Coupon 7.375% per annum, payable annually
Security Unsecured
Listing At Singapore Stock Exchange and London Stock Exchange
Repayment Period Bullet repayment after 5 years
Maturity date 10.08.2021

“National Thermal Power Corporation (NTPC) Limited has  drafted/prepared its long-term Corporate Plan and has planned to achieve 32 GW installed capacity through  renewable energy resources by 2032.

Masala bonds are bonds issued outside India but denominated in Indian Rupees, rather than the local currency. Masala is a Hindi word and it means spices. The term was used by IFC to evoke the culture and cuisine of India. Unlike dollar bonds, where the borrower takes the currency risk, masala bond makes the investors bear the risk.

The first Masala bond was issued by the World Bank backed International Finance Corporation in November 2014 when it raised 1,000 crore bond to fund infrastructure projects in India. Later in August 2015 International Financial Corporation for the first time issued green masala bonds and raised Rupees 3.15 Billion to be used for private sector investments that address climate change in India.

In July 2016 HDFC raised 3,000 crore rupees from Masala bonds and thereby became the first Indian company to issue masala bonds. In the month of August 2016 public sector unit NTPC issued first corporate green masala bonds worth 2,000 crore rupees.