NTPC raises $750-mn loan in yen
This is the largest-ever syndicated loan raised by any Asian firm in the currency
NTPC, the country’s largest power generator, has raised a syndicated Japanese yen loan (JPY) worth $750 million (~5,300 crore).
This is the largest ever syndicated yen loan raised by any Asian company from the offshore ‘samurai’ loan market, said NTPC. Also, this is the highest ever single foreign currency loan it raised.
Raised under the automatic route of the Reserve Ban's regulations regarding extetrnal commercial borrowing, it has been fully underwritten by State Bank of India, Tokyo; Sumitomo Mitsui Banking Corporation, Singapore; and Bank of India, Tokyo.
The facility has door-todoor maturity of 11 years under two tranches, NTPC said.
This is the third bond offering by NTPC on the international markets in the current financial year. In 2019, it raised $450 mn under its $6 billion Medium Term Note Programme. The latter was set up in 2006 and this was the 10th, taking the cumulative amount raised under the Programme to $4.3 billion. In May 2019, it also raised ~4,300 crore through bonds at an annual coupon of 7.32 per cent.
The company said proceeds from the latest JPY loan would be used to fund installation of flue gas desulphurisation (FGD) systems at its units. This is to be done at its coal-based power plants to reduce their emissionof sulplur oxides.
“It will also be installed in new hydro and thermal power projects, using ultra supercritical technology with low carbon emission,” said NTPC. Having some of the country’s oldest thermal power plants, it needs to install FGD and other emission control systems to meet new environmental norms.
In its investor meeting last year, NTPC said it had awarded FGD contracts for around 30,000 Mw of its units. The company’s current capacity is 58,156 Mw, of which coal-based power is 42,900 Mw.