Power Finance Corp issues maiden Euro Green Bond, aims to mop up £300 mn

The 7-year instrument has been priced at 1.841%, which PFC says is the lowest yield locked in by an Indian issuer in Euro markets

Leading power sector lender, Power Finance Corporation (PFC) issued its maiden Euro Green Bond of £300 million. The 7-year instrument has been priced at 1.841 per cent.

PFC said this is the lowest yield locked in by an Indian Issuer in the Euro markets.

"It is not only the first Euro bond issuance by PFC, but also the first-ever Euro denominated Green bond issuance from India. Moreover, it is the first ever Euro issuance by an Indian NBFC and the first Euro bond issuance from India since 2017," PFC said in a public statement.

With the issuance, PFC has also forayed in the European market for its international fund raising.

The company also said the issuance saw participation from institutional investors across Asia and Europe from across 82 accounts and was oversubscribed 2.65 times.

R S Dhillon, chairman and managing director, PFC said the bond issuance would assist the company in managing the renewable energy portfolio.

"This issuance also demonstrates our commitment for achieving India’s renewable energy goals. Further, this bond issuance would help PFC in diversifying its currency book as well as the investor base," Dhillon said.  

PFC is witnessing a marked shift in its lending portfolio owing to stress in thermal power generation, with no new private investment in the sector. It is expected that renewable energy and transmission & distribution (T&D) would attract the bulk of the lending by PFC going forward, along with newer sectors such as lift irrigation, electric mobility and energy efficiency.

PFC's loans to the T&D sector have grown 387 per cent in the past five years. In comparison, loans to thermal power units have grown 16.56 per cent. While a late entrant in the renewable space, PFC’s RE assets basket stands at Rs 37,005 crore.