Financial Briefs

India and overseas

NTPC lists its masala bonds on the LSE (India)

NTPC Limited has listed its masala bonds on the London Stock Exchange (LSE). Under the $4 billion medium term note (MTN) programme, NTPC raised Rs 20 billion in April 2017 and Rs 20 billion in August 2016. These are the first MTN and masala bonds to be listed on the new International Securities Market (ISM) of the LSE. The ISM is a new multilateral trading facility, which is aimed at institutional as well as professional investors for primary debt issuance. The listing is expected to provide an opportunity to reach quality investors for meeting NTPC’s financing requirements.

REC to extend Rs 857 billion loan to Tamil Nadu utilities

The Rural Electrification Corporation (REC) has entered into MoUs with Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) and Tamil Nadu Transmission Corporation Limited (TANTRANSCO) for extending financial assistance of Rs 857.23 billion. While TANGEDCO will receive a loan of up to Rs 600.63 billion, TANTRANSCO will receive up to Rs 256.6 billion. The MoUs are non-binding and the financial assistance is subject to the appraisal of proposals submitted by the entities to REC and the approval of the competent authority.

AIIB approves $160 million loan for a T&D strengethening project in Andhra Pradesh

The Asian Infrastructure Investment Bank (AIIB) has approved a $160 million loan for a transmission and distribution (T&D) strengthening project in Andhra Pradesh. This is the first time that the multilateral China-based bank has extended credit for an Indian project. The project will be implemented under the 24×7 Power for All programme, and will be co-financed by the World Bank. The project aims to strenthen the T&D network, increase network capacity, improve system reliability and support operational reforms to improve the commercial performance of the distribution companies in the state.

EESL to invest £100 million in the UK

Energy Efficiency Services Limited (EESL) aims to promote and implement low-carbon, energy efficiency and renewable energy solutions in both the public and private sectors in the UK. EESL will invest £100 million in the UK’s £6.4 billion energy efficiency services market over the next three years. EESL has a joint venture with London-based EnergyPro Limited, in which the former holds 80 per cent stake.

Sterlite Power’s InvIT raises Rs 10.12 billion from anchor investors

The initial public offering (IPO) of India Grid Trust, an infrastructure investment trust (InvIit) sponsored by Sterlite Power Ventures, was subscribed by 1.35 times. The company fixed a price band of Rs 98-Rs 100 per unit. India Grid Trust raised Rs 10.12 billion from 19 anchor investors at the upper end of the price band. This issue marked the first InvIT of the power sector. The key anchor investors were Deutsche Global Infrastructure Fund, Credit Suisse (Singapore), Reliance Nippon Life Insurance Company, Copthall Mauritius Investment and Edelweiss Tokio Life Insurance Company. The proceeds will be used for repaying loans and general corporate purposes. Sterlite Infraventures Limited is the trust’s investment manager and Axis Trustee Services is its trustee.

Essar Power seeks a debt recast plan

Essar Power Limited has sought a debt recast plan from the lenders to its subsidiary Essar Power Gujarat Limited (EPGL), which operates a 1,200 MW imported coal-based power plant in Gujarat. EPGL is not expecting a favourable order from the state electricity regulatory commission on its tariff increase petition owing to the increase in Indonesian coal prices, given the recent Supreme Court judgment in this regard. The company believes that it may not be able to make interest and principal repayments based on the current coal prices. The lenders to EPGL include the State Bank of India, United Bank of India, Indian Overseas Bank, and Allahabad Bank among others.

World Bank sanctions $59 million loan for a power network efficiency project (Bangladesh)

The World Bank has sanctioned a $59 million loan for a power network efficiency project in Bangladesh. The Power System Reliability and Efficiency Improvement Project is expected to reduce power outages and load shedding. It will also cut electricity generation costs significantly by modernising generation processes and practices through the installation of new software and hardware. In addition, the project is expected to lower greenhouse gas emissions by reducing the use of carbon-intensive fuel in electricity generation.

EC announces Euro 800 million funding for cross-border energy projects (Europe)

The European Commission (EC) will release funds worth Euro 800 million for projects in the areas of electricity, gas and smart grid infrastructure. These projects are expected to strengthen the European Union’s (EU) internal energy market, enhance security of energy supply, and help provide clean and sustainable energy for Europe. The funding comes under the Connecting Europe Facility [CEF]. The total amount of CEF funding available for energy projects is Euro 5.35 billion for the period 2014-20. The proposed projects can be either studies or implementation works. They must be aimed at removing bottlenecks to ensure seamless energy flow and end the energy isolation of EU countries.

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