PTC Financial Services partners UKCI, DFID for India's first green fund

PTC Financial Services (PFS) is setting up India’s first infrastructure development debt fund, solely for renewable energy projects, in partnership with UK Climate Investments LLP (UKCI) and Department for International Development (DFID), UK. The company has raised Rs 400 crore from State Bank of India under the credit enhancement scheme, enabling it to raise bonds worth Rs 2,000 crore.

It had last gone for a domestic bond issue in 2012, when it came up with an infrastructure bond under section 80CCF of the Income Tax Act that allowed exemption for investment in these bonds.

The Renewable Infrastructure Development Fund (RIDF) will be set up with an initial corpus of Rs 500 crore and managed by a separate company. “RIDF will do debt financing for renewable projects that are commissioned and operational for one year,” Pawan Singh, managing director and chief executive of PFS, told Business Standard.

Singh said the cost of funding will be lower in RIDF compared to rates at which PFS usually raises money. At present, 62 per cent of PFS’ portfolio comprises renewable energy projects, while its exposure to the conventional power sector will come down to 5 per cent by the middle of next year.

“Our thermal power exposure is 17 per cent of our portfolio, which we aim to bring down to 9 per cent this fiscal. Two of the stressed assets, Prayagraj and SKS Energy, will get resolved,” said Singh.

PFS separately raised a loan of Rs 1,000 crore from SBI for a 10-year tenure, linked to the marginal cost of funds-based lending rate.

In renewables, Singh said they were lending to leading firms including ReNew Power, Azure Power, Mytrah Energy, ACME Group, Greenko, and Hero Futures, among others. The firm has also started lending to power transmission projects, the latest being of Adani Power Transmission and Sterlite Power.

PFS expects the renewable sector to show robust growth. The RIDF is a step to tap the growing sector. Singh said the fund will likely get the Reserve Bank of India’s clearance by March, and they may float it in the market by May. “We aim to grow 20-25 per cent in the next fiscal, both in terms of size and bottom line,” he said.

With the pipeline of projects in conventional power drying up, PFS had, over the last few years, diversified its portfolio.

It has close to eight hybrid annuity model road projects, and is looking to finance sewage treatment plants and the Ganga cleaning initiative. It also plans to finance electric vehicle infrastructure.