Financial Briefs

India and overseas

PFC approves loans worth Rs 36 billion for discoms in Uttar Pradesh (India)

The Power Finance Corporation (PFC) will provide a Rs 36 billion loan to four distribution companies in Uttar Pradesh. This is the largest amount to be loaned by PFC to distribution companies. The discoms will use the funds to provide connections to 1.14 million households in remote areas.

PFC to issue tax-exempt bonds

The central government has given its consent to PFC to issue bonds eligible for capital gains tax exemption under Section 54EC of the Income Tax Act. PFC is likely to soon launch the maiden 54EC bonds, which are expected to carry a credit rating of AAA.

Adani Power to sell Mundra power plant to Adani Power Mundra Limited

Adani Power has approved the hiving off of its 4,620 MW Mundra coal-based power plant in Gujarat to its subsidiary, Adani Power Mundra Limited. The hiving off will enable Adani Power to source funding more efficiently for investing in capacity expansion by its subsidiaries and in the acquisition of assets. In a separate development, Adani Enterprises Limited has diluted its stake in Adani Green Energy Limited (AGEL) to below 50 per cent, as a result of which AGEL has ceased to be a subsidiary of Adani Enterprises Limited.

Cabinet approves IREDA’s IPO

The Union cabinet has approved the Indian Renewable Energy Development Agency’s (IREDA) plan for an initial public offering (IPO), entailing the issue of 139 million equity shares of Rs 10 each. It has approved the issue of shares to retail investors and IREDA employees at a discount of 5 per cent on the issue price, with a cap of 0.5 per cent on equity post the issue for central public sector enterprise employees.

World Bank approves $240 million loan for Andhra Pradesh

The World Bank has approved a $240 million loan for the implementation of the Power for All scheme in Andhra Pradesh. The loan from the International Bank for Reconstruction and Development has a maturity period of 19 years and a five-year grace period. The funds will be used to improve power supply to rural areas, deploy smart grids in select towns, strengthen the intra-state transmission and distribution network and support smart consumer meters with two-way communication and back-end IT infrastructure, etc. The project is the first in India to be co-financed by the Asian Infrastructure Investment Bank and the World Bank.

SBI finances Rs 4 billion of solar PV projects

The State Bank of India (SBI) has financed solar rooftop projects worth Rs 4 billion, which would add about 100 MW of capacity to the grid. SBI has availed of a loan of $625 million from the World Bank for on-lending to viable grid-connected rooftop solar photovoltaic (PV) projects undertaken by PV developers/ aggregators and end-users, for the installation of rooftop solar systems in commercial, institutional and industrial buildings. The implementation of this programme by SBI will support the installation of over 600 MW of rooftop solar capacity. The developers receiving financing under this initiative include Azure Power, Amplus and Cleanmax.

Edelweiss to take over Adhunik Power

A consortium of 24 lenders, led by SBI, has offloaded a majority stake in Adhunik Power and Natural Resources Limited (APNRL) to the Edelweiss Group. The banks would sell Rs 32 billion loan to the Edelweiss Asset Restructuring Company under a 15:85 structure, wherein 15 per cent would be paid in cash and the balance as security receipts paid over five to seven years. As per the deal, the Edelweiss Group’s offshore fund would also acquire a part of the equity stake. Although Edelweiss had bid for 35 per cent stake, the consortium is yet to finalise the quantum of stake sale. Edelweiss has emerged as the sole bidder in the Swiss Challenge method auction adopted by the lenders, who had acquired 51 per cent stake in the company on conversion of their debt into equity under the strategic debt restructuring scheme. Currently, private equity (PE) firms SBI Macquarie and IDFC PE hold 25 per cent stake in APNRL while the promoters hold 24 per cent stake and 51 per cent is with banks.

Taiwan draws up plans to attract $59 billion in renewable energy finance (Taiwan)

The Taiwanese government is planning to attract $59 billion of private capital to boost the share of renewable energy in Taiwan’s power mix to 20 per cent by 2025. Besides increasing the share of renewables, the country is seeking to eliminate nuclear power, which currently accounts for 14 per cent of its power supply, and reduce the share of coal in electricity production to 30 per cent from 45 per cent at present. In order to attract the necessary renewable energy investment, the authorities will guarantee purchases of the electricity thus produced.

Apple issues $1 billion green bonds (USA)

California-based technology giant Apple Inc. has issued $1 billion in green bonds dedicated to financing clean energy projects across its global business operations. This is the largest green bond to be issued by a US corporation. Apple is expected to spend the majority of the proceeds within two years of the issuance of the bonds. The 10-year bonds, which will mature in 2027, will give investors a yield of 95-100 basis points over comparable US treasuries. In 2016, Apple had issued the first green bond, raising $1.5 billion.

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