- Indian state-run utility NTPC introduced its Green Masala Bonds at the Singapore and London stock exchanges to finance its renewable energy project, primarily solar and wind
- Bonds will be available in Indian currency and carry an interest rate of 7.375% per annum
- The bonds will be offered to overseas investors; interest and payment will be made in US dollars
To capitalize on the interest surrounding India’s renewable energy program, the National Thermal Power Corporation (NTPC) launched Green Masala Bonds in London on August 3, 2016, raising 20 billion INR ($300 million). These bonds will be listed on the Singapore and London stock exchanges and all the proceeds will be used to finance renewable energy projects like solar and wind.
The Green Masala Bonds are not to be offered or sold in India, and will only be available for overseas investors. These bonds carry certification from Climate Bonds Initiative.
The NTPC is the largest state run utility in India. It is in charge of helping the country add 15 GW of grid connected solar PV power projects under the Jawaharlal Nehru Mission (JNNSM).
With an interest rate of 7.375% per annum, the bonds will mature on August 10, 2021. These will be available in Indian currency (INR), but all the interest and payment will be made in US dollars.
This announcement comes after Minister of State for Power, Coal, New and Renewable Energy in India, Piyush Goyal visited UK this year and it follows announcements made by the Indian Prime Minister Narendra Modi to list $1 billion equivalent of Masala Bonds in the UK.
The London Stock Exchange (LSE) has listed 35 green bonds in various currencies, raising around $8.7 billion. In July 2016, HDFC listed the world’s first Masala Bond by an Indian corporate. Prior to that, in June 2016 Axis Bank came out with India’s first internationally listed certified green bond.
LSE plc CEO and Director of International Development at the LSE Group, Nikhil Rathi, said, “NTPC’s landmark independently certified green Masala bond listing, the first Masala bond by an Indian quasi-sovereign issuer, represents another historic event for Indian finance. We are honoured to have been chosen to support NTPC access Rupee-based financing in London’s international capital markets, reinforcing India’s ambitions to generate 175GW of renewable energy by 2022.”