India’s largest power generating company NTPC Limited has raised syndicated Japanese yen loan (JPY) worth $750 million. This is the largest ever syndicated JPY loan raised by any Asian company from offshore Samurai loan market, said NTPC in a public statement. It is also the highest ever single foreign currency loan raised by NTPC.
Raised under automatic route of RBI ECB regulations, the loan has been fully underwritten by State Bank of India, Tokyo, Sumitomo Mitsui Banking Corporation, Singapore and Bank of India, Tokyo. The facility has a door to door maturity of 11 years under two tranches, it said.
This is the third bond offering by NTPC from the international markets in the current financial year. In 2019, it raised $450 million under its $6 billion Medium Term Note (MTN) Programme. NTPC’s $6 billion MTN Programme was set up in 2006 and this issuance was the tenth offering under the Programme taking the cumulative amount raised under the MTN Programme to US $ 4.30 billion. In May last year, it also raised Rs 4,300 crore through bonds at a coupon of 7.32 per cent rate.
The company said the proceeds from the latest JPY loan would be used in to fund capital expenditure for installation of Flue Gas Desulphurization (FGD) systems at its existing units. FGD is retrofitted at existing coal based power planst to reduce their of SOx emission. “It will also be installed in new hydro projects and new thermal power projects using ultra supercritical technology with low carbon emission,” said NTPC’s statement.
Having some of the country’s oldest thermal power plants, NTPC would need to install FGD and other emission control systems to meet new environmental norms. In its investor meeting last year, NTPC said it has already awarded FGD for around 30,000 MW of units and one in Vidhayachal unit has been commissioned.
NTPC's current capacity stands at 58,156 MW of which coal based power has the lion's share of 42,900 MW.