Financial Briefs

India and overseas

US to provide $7.5 million to help develop India’s electricity grid (India)

The US Department of Energy (DOE) will provide $7.5 million for the development and advancement of India’s electricity grid. The Indian Ministry of Science and Technology will match the commitment made by the DOE. The investment has strengthened the DOE’s collaboration with India under the US-India Partnership to Advance Clean Energy.

REC raises $450 million through green bonds

The Rural Electrification Corporation (REC) has launched its first green bond for trading on London’s International Securities Market. The company has raised $450 million through the 10-year dated bonds, which have an annual yield of 3.965 per cent. The bond was oversubscribed 3.9 times on the final order book and garnered strong international investor interest, with Asian investors accounting for 68 per cent of the order book, and investors from the Europe, Middle East and Africa region accounting for 32 per cent. REC will use the proceeds of the Climate Bonds Initiative-certified green bonds to finance environment-friendly projects across India. With this, REC has become the first Indian PSU to launch green bonds denominated in US dollars. The bonds have been offered under REC’s existing $1 billion medium-term note programme and have been listed on the London Stock Exchange as well as on the Singapore Stock Exchange.

Government to devise a strategy for stressed power assets

The central government is planning to appoint SBI Capital Markets Limited for devising a strategy to deal with the issue of stressed power assets. The power sector accounts for 40 per cent of the total bad loans of Rs 10 trillion with banks at present. To this end, the government is in talks with banks and financial institutions such as REC and the Power Finance Corporation.

GE Energy Financial Services to invest $90 million in RattanIndia’s solar portfolio

In a bid to expand its renewable energy portfolio, GE Energy Financial Services is planning to invest $90 million in developing a solar power project portfolio of 500 MW with the RattanIndia Group in the ratio of 51:49. The company has already invested in RattanIndia’s solar projects aggregating 210 MW at Bhadla, Allahabad, Pavagada and Katol.

MPL to acquire a controlling stake in PXIL

Power trading licensee Manikaran Power Limited (MPL) is likely to acquire a controlling stake in Power Exchange India Limited (PXIL) from the National Stock Exchange (NSE). The NSE, along with the National Commodity and Derivatives Exchange (NCDEX), owns a 61 per cent stake in PXIL. In January 2017, NSE-NCDEX had proposed to shut down PXIL as it was incurring losses. However, there was strong dissent from other stakeholders of the company including GMR Energy, Tata Power, JSW Energy Limited, PFC, Gujarat Urja Vikas Nigam Limited and West Bengal State Electricity Distribution Company Limited.

JSW Energy to raise Rs 210 billion through various securities

JSW Energy Limited’s shareholders have given their approval to the board of directors to raise up to Rs 210 billion through various securities. This includes Rs 50 billion through issuing non-convertible debentures, over Rs 48 billion through foreign currency bonds and masala bonds, and up to Rs 75 billion through the issuance of fresh equity. The company is exploring new opportunities in the renewable energy and transmission and distribution spaces.

Warburg Pincus invests Rs 7 billion in CleanMax Enviro Energy Solutions

Private equity firm Warburg Pincus has invested around Rs 7 billion ($100 million) in CleanMax Enviro Energy Solutions Private Limited, a Mumbai-based rooftop solar project developer. This is Warburg’s seventh transaction in India in the past one year. CleanMax Enviro Energy Solutions will use the funds to expand its footprint in solar power markets in India and abroad.

FMO achieves first closing of the $412 million CIO fund (Netherlands)

The Dutch Development Bank (FMO) has successfully achieved the first closing of the $412 million Climate Investor One (CIO) fund. The fund was set up to focus on renewable energy-based projects in developing and emerging markets in Africa, Asia and Latin America. The fund uses private sector financing as well as public sector donor funding. The fund is supported by the Directorate General for International Cooperation, the Ministry of Foreign Affairs of the Netherlands and Nederlandse Waterschapsbank N.V. (NWB Bank). Some of its global investors are KLP Norway, Sanlam Investments Holdings in South Africa and the UK’s Royal Borough of Windsor & Maidenhead Pension Fund.

EBRD invests in Lietuvos Energija’s green bonds (Lithuania)

The European Bank for Reconstruction and Development (EBRD) has announced an investment of Euro 30 million in a Euro 300 million green bond issue by Lithuanian energy utility Lietuvos Energija. The green bond is a part of the Euro 1 billion programme that aims to finance energy efficiency projects. Lithuania was the first country in Eastern Europe to issue green bonds.

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