State-run firms likely to launch $1-bn masala bonds in UK

As India gears up to raise funds to meet renewable energy target, state-run companies like NTPC, Power Finance Corp and REC are likely to launch masala bonds worth $1 billion in the UK in the next four months.

The bonds, which will be of  $150-250 million, are likely to be limited to a band of five to seven years.

"Companies, including NTPC, Neyveli Lignite Corporation, Power Finance Corporation, Power Trading Corporation and Rural Electrification Corporation are likely to launch these bonds in the next three or four months in UK to gauge investor appetite," Power Minister, Piyush Goyal said today.

These will be subjected to decisions made by the boards of the PSU energy companies, the minister said at a round table -- Financing Renewables and Energy Efficiency, organised by the city of London here.

Goyal informed investors that the Indian Renewable Energy Development Agency is coordinating a billion-dollar equity fund, perhaps the largest in renewable space.

This will be professionally managed by an independent international fund management company. Indian public sector companies have already committed $315 million, he added.

As India gears up to meet its ambitious renewable energy targets of 175 GW of installed capacity by 2022, the country is exploring international mechanisms of funding and is evaluating new and innovative tools to finance the renewables sector.