NTPC raises $ 750 million to finance the green momentum

NEW DELHI: state generation utility NTPC has collected a loan in Japanese yen worth $ 750 million, the largest debt ever obtained by any Asian company from the Samurai offshore loan market, to finance its ecological momentum and the acquisition of hydel units under the Center's divestment plan .

This is also the single-highest foreign currency loan raised by NTPC, which will use the money to fund installation of FGD (flue gas desulphurisation) system that cuts SO2 (sulfur dioxide) emission from power houses and hydel units as well as projects using ultra -supercritical technology with low carbon emission.

The government is looking at selling its stake in THDCIL and Neepco and identified NTPC as a prospective buyer of the two hydel companies. NTPC is aslo expanding its solar portfolio and going for a mix of domestic and overseas loans to optimize cost of funding capital expenditure.

The yen loan has a door-to-door maturity of 11 years in two tranches and has been fully subscribed by SBI, Tokyo; Sumitomo Mitsui Banking Corporation, Singapore and Bank of India, Tokyo. It has been raised under the automatic route provided for in the regulation of the RBI for ECB regulations (external commercial loans).

NTPC recently signed a 15-year loan agreement for Rs 5,000 crore with SBI, at an interest rate linked to its 3-month MCLR (marginal cost of funds-based lending rate), to partly fund its capital expenditure. The funds will be used for various ongoing projects, including capacity expansion and upgrade of existing power plants for improving emission.