NTPC to raise $750 mn via ECB term loan for expansion in RE, coal mining

The loan shall be unsecured, without any guarantee or letter of comfort from Govt of India

India’s largest power generating company, state-owned NTPC limited will raise $750 million through external commercial borrowing as term loan to fund its expansion plans in the renewable energy and coal mining businesses.

The company floated a ‘request for proposal’ (RfP) on Monday. “NTPC Ltd is looking to raise external commercial borrowing (ECB) in the form of term loan amounting to $500 million plus green shoe option of $250 million,” the RfP said.

The RfP stated, the proceeds from the loan would be utilised towards “capital expenditure for ongoing/new capacity addition programme including renewable energy projects, coal mining & washeries, refinancing of existing ECBs/rupee loans availed domestically for capex etc.”

The loan shall be unsecured, without any guarantee or letter of comfort from the Government of India. Negative lien will be provided with carve out for certain permitted borrowing for which security can be created by the company, said the RfP.

The average maturity period of the term loan will be seven years under the proposed ECB. Repayments will be made in seven equal annual instalments starting from the fourth year. Last date for submission of bids is January 31, said the company.