Financial Briefs

India and overseas

PFC raises $400 million through green bonds on the London Stock Exchange (India)

The Power Finance Corporation (PFC) has raised $400 million through its maiden green bond issuance. The funds have been earmarked promoting renewable energy in the country. The 10-year bonds have a fixed coupon rate of 3.75 per cent and are certified by the Climate Bonds Initiative. The pricing of the bond has a spread of 157.5 basis points over the 10-year US treasury by an Indian issuer. The notes will be listed on the London Stock Exchange and the Singapore Exchange. The green bond offering is in line with PFC’s objective to diversify its source of funding.

Adani Transmission to acquire RInfra’s Mumbai assets for Rs 132.51 billion

Adani Transmission Limited has signed a definitive binding agreement with Reliance Infrastructure Limited (RInfra) for 100 per cent acquisition of its electricity generation, transmission and distribution businesses in Mumbai for Rs 132.51 billion. In addition, under-approval regulatory assets estimated at Rs 50 billion and net working capital on closing estimated at Rs 5.5 billion will flow directly to RInfra. The total consideration value is estimated at Rs 188 billion. RInfra will utilise the proceeds of the transaction to eliminate its debt and gain Rs 30 billion cash surplus. This is reportedly the largest ever debt reducing exercise by any company.

India signs $98 million loan agreement with the World Bank for solar park project

India and the World Bank have signed a $98 million loan agreement and a $2 million grant agreement for the Shared Infrastructure for Solar Parks Project. While $75 million has been extended by the International Bank for Reconstruction and Development and has a maturity period of 19 years, the remaining $23 million has been provided from the Clean Technology Fund (CTF) and has a maturity of 40 years. The $23 million CTF grant is interest free. The funds will be provided to the Indian Renewable Energy Development Agency, which will grant sub-loans to the states for the development of solar parks.

DVC shelves its plan to sell its 1,200 MW plant to NLC JV

The Damodar Valley Corporation (DVC) has shelved its plan to sell the 1,200 MW Raghunathpur coal-based power station to a proposed joint venture (JV) with NLC India Limited. DVC had reached an agreement with NLC two years ago to transfer the plant to a JV between the two companies, with NLC holding a 74 per cent share and DVC controlling the remaining 26 per cent. DVC is jointly owned by the central government, and the West Bengal and Jharkhand governments. While the central and Jharkhand governments gave their approval to the transfer, the West Bengal government withheld its consent. Consequently, DVC decided to cancel the agreement. The sale of the plant would have enabled DVC to reduce its long-term debt, which stands at Rs 210 billion.

CPPIB to acquire stake in ReNew Power for Rs 22.5 billion

The Canada Pension Plan Investment Board (CPPIB) has decided to acquire about 15 per cent stake in ReNew Power Ventures Private Limited for an aggregate value of Rs 22.5 billion ($350 million). The acquisition is planned to be executed in two stages. In the first stage, CPPIB will make a primary investment of $200 million through convertible preference shares, which will be converted into equity once ReNew Power floats an initial public offering. Further, it plans to buy 6.33 per cent of ReNew Power’s share at $150 million from the Asian Development Bank (ADB). The deal, once complete, will mark the largest investment in a renewable energy company in India in 2017.

ADB approves $583 million loan for RPower’s LNG terminal (Bangladesh)

The ADB has approved a loan package of $583 million for the development of Reliance Power Limited’s liquefied natural gas (LNG) terminal along with a 750 MW power project in Bangladesh. The package includes loans and partial risk guarantees for both projects. The power generation plant will be located in Meghnaghat near the capital city of Dhaka, and the LNG terminal will be located near Kutubdia Island south of Chittagong. The two projects are expected to significantly augment power generation and infrastructure in Bangladesh. ADB’s financing package includes loans and partial risk guarantees for the power generation facility and for the LNG terminal. The project cost is approximately $1 billion.

AfDB approves a $324 million funding for renewables (Morocco and Côte d’Ivoire)

The African Development Bank (AfDB) has approved a loan aggregating $324 million to support two renewable energy projects in Morocco and Côte d’Ivoire. AfDB has earmarked $265 million (about 82 per cent of the total loan amount) for the development of two solar projects (NOORM I and II) in Morocco. The two projects have an estimated combined cost of $2.04 billion and will have a cumulative generation capacity of 800 MW. Further, the AfDB has committed $59 million for the execution of the Singrobo-Ahouaty project in Côte d’Ivoire. It involves the design, construction and operation of a 44 MW hydropower project on river Bandama.

EIB provides funds of $150 million for renewable energy projects (Peru)

The European Investment Bank (EIB) is set to invest $150 million for the construction of a wind farm and a photovoltaic power plant in Peru. The projects will be developed by renewable energy company Enel Green Power Peru SA and will have an installed capacity of 312 MW once commissioned.

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