Financial Briefs

India and overseas

NTPC raises Euro 500 million via Euro-denominated bonds (India)

NTPC Limited has raised Euro 500 million through the sale of euro-denominated bonds in the overseas market. The bonds have a 10-year maturity and carry a coupon rate of 2.75 per cent with a yield of 2.81 per cent. The company plans to utilise the proceeds from the issue for its capital expenditure needs. This is the first 10-year Euro-denominated bond issuance by an Asian and an Indian power utility.

Rajasthan government issues securities under UDAY

The Rajasthan government has issued special securities worth Rs 15.65 billion under the Ujwal Discom Assurance Yojana (UDAY). The securities, issued on February 6, 2017, have a face value of Rs 100. The minimum size of the bid was Rs 1 billion. The interest on bonds will correspond to the yield on government securities at the close of February 3, 2017.

REC extends financial assistance to utilities in Tamil Nadu, Andhra Pradesh and Karnataka

The Rural Electrification Corporation (REC) has signed a loan agreement with Tamil Nadu’s state power utilities for financial assistance worth Rs 68.9 billion. The agreements were signed with Tamil Nadu Generation and Distribution Corporation Limited and Tamil Nadu Transmission Corporation Limited for the implementation of a 800 MW supercritical thermal power plant (TPP), renovation and modernisation of existing TPPs, and the establishment of new 765 kV and 400 kV substations in and around Chennai. REC is also extending financial assistance worth Rs 600 billion to utilities in Andhra Pradesh. The assistance comprises Rs 400 billion to the Power Generation Corporation of Andhra Pradesh, Rs 100 billion to the Transmission Corporation of Andhra Pradesh and Rs 100 billion to the two state discoms. REC is also extending financial assistance worth Rs 390 billion to utilities in Karnataka. While the company will extend Rs 120 billion to Bangalore Electricity Supply Company for strengthening, augmentation and upgradation of the distribution infrastructure and sub-transmission network, it will provide Rs 270 billion to the Karnataka Power Corporation for generation projects and other requirements.

Japanese investors pick up 10 per cent stake in ReNew Power

Japanese firm JERA Company, Inc. has bought 10 per cent stake in ReNew Power Ven-tures for $200 million through the subscription of newly issued shares. The deal values ReNew Power at $2 billion. JERA is a joint venture between Japan’s two largest utilities, the Tokyo Electric Power Company and Chubu Electric Power Company.

Lenders put up 55 per cent stake for sale in GMR project

A consortium of lenders led by IDBI Bank has put on sale 55 per cent stake in a GMR-built gas-based power project at Rajahmundry in Andhra Pradesh, which they had acquired in 2016 following debt restructuring. Last year, the lenders had converted a part of their debt into equity in GMR Rajahmundry Energy, which operates a 768 MW natural gas-based power plant. Following the conversion, the lenders got 55 per cent stake in the project, while the promoters’ holding was reduced to 45 per cent. The project still has a debt of Rs 23.66 billion.

CFE to invest MXN 40 billion in transmission projects (Mexico)

Mexican state-owned energy firm Comision Federal de Electricidad (CFE) has announced that it will invest MXN250 billion in new generation, transmission and service improvement projects between 2017 and 2022. The firm will focus on profitability initiatives and is open to partnerships with the private sector. About MXN 170 billion will be aimed at generation projects, with the installation of an additional capacity of 8 GW to curb the annual national demand growth of about 3 per cent. Further, the company plans to allocate MXN 40 billion for transmission activities and MXN 50 billion for the implementation of energy loss reduction measures.

Macquarie Group to buy offshore wind farm (UK)

The Australia-based Macquarie Group has concluded a Euro 1.6 billion deal with Denmark’s DONG Energy to buy half of an offshore wind farm in the UK. The deal will see Macquarie’s European Infrastructure Fund 5 and Macquarie Capital each take 25 per cent of the Race Bank project, a 573 MW wind farm being built off the North Norfolk coast. The deal price includes 50 per cent equity stake and a commitment to fund half the capital cost, including the price of connecting the project to the grid. According to DONG, the proceeds would be payable starting this year until the project is complete, and would be funded by a combination of project finance debt and equity. The Race Bank project will be operational in 2018 and will comprise 91, 6 MW wind turbines. DONG Energy will handle the project construction and provide operations and maintenance services. It will also handle the sale of Macquarie’s share of electricity output and green certificates from the project.

ReNew Power Ventures raises $475 million via green bonds

ReNew Power Ventures has raised $475 million by selling green bonds to overseas investors. The bonds carry a coupon rate of 6 per cent, 38 basis points higher than the initial guidance. Bank of America, Merrill Lynch, JP Morgan and HSBC were some of the bankers that arranged the deal. The securities will be listed on the Singapore Stock Exchange. The company will utilise the funds to refinance debt.

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