Financial Briefs

India and overseas

Powergrid files for $1.1 billion InvIT IPO (India)

Power Grid Corporation of India Limited (Powergrid) has filed draft papers for an initial public offering (IPO) of its first infrastructure investment trust (InvIT) for around Rs 80 billion. The IPO aims to raise up to Rs 49.95 billion by selling new units of the InvIT and another Rs 30 billion through the sale of Powergrid’s units in the trust. The InvIT will initially have a portfolio of five projects, entailing 11 transmission lines aggregating 3,698 km owned and operated by Powergrid across five states, which were awarded to it through the tariff-based competitive bidding route. The power ministry had, in September 2020, secured cabinet approval for Powergrid to monetise its transmission lines via the InvIT. The InvIT IPO is being managed by ICICI Securities, Axis Capital and Edelweiss.

PFC issues $500 million senior unsecured USD bonds for over 10 years

Power Finance Corporation Limited (PFC) has raised $500 million through the issuance of doller-denominated bonds under the Reg S route, with a fixed maturity of May 16, 2031. The bonds have a fixed coupon of 3.35 per cent per annum. The proceeds from the bonds will be utilised in accordance with the external commercial borrowing regulations of the Reserve Bank of India, including for on-lending to power sector utilities. PFC’s order book amounted to around $2.55 billion, achieving an oversubscription of 5.1 times.

JSW Energy recalls its bid to acquire Ind-Bharat Energy’s stressed thermal asset

JSW Energy Limited has terminated its resolution plan to take over the stressed thermal power asset of Ind-Bharat Energy (Utkal) Limited, which is setting up a 700 MW thermal power plant in Odisha. On October 3, 2019, JSW Energy had submitted a resolution plan to the Committee of Creditors for the corporate insolvency resolution of Ind-Bharat Energy. Reportedly, in the intervening period of over 15 months, a material adverse change event has occurred, which entitles the company to terminate the resolution plan.

Kalpataru Power acquires 51 per cent stake in Brazil’s Fasttel for $8.8 million

Kalpataru Power do Brasil Participações Ltda, a wholly owned subsidiary of Kalpataru Power Transmission Limited (KPTL) in Brazil, has signed a definitive agreement to acquire 51 per cent stake in Fasttel Engenharia Ltda, Brazil (Fasttel) for around $8.8 million. The acquisition of Fasttel is in line with KPTL’s strategy to strengthen its core engineering, procurement and construction business and have a geographical presence in stable and growing markets. Fasttel operates in three business segments – EPC of substations and transmission and distribution network services – and had revenues of around $47 million in 2020. The company has a presence in Brazil, with an order book of around $95 million.

Vietnam’s EVNNPT to invest VND 17.55 trillion in transmission projects in 2021 (Vietnam)

State-owned Electricity of Vietnam’s (EVN) subsidiary, National Power Transmission Corporation (EVNNPT), plans to invest VND 17.55 trillion in 107 transmission projects in 2021. The utility’s major focus will be on commencing construction of 44 projects, comprising 7×500 kV and 37×220 kV projects. Further, EVNNPT will complete and put into operation 63 projects, comprising 19×500 kV and 44x 220 kV projects. Of the total investment, VND 12.8 trillion will be spent on the integral 500 kV VungAng-Doc Soi-Pleiku 2 (Circuit 3) line, and other projects that will help power plants and renewable energy projects operate at full capacity.

ADB provides a loan to fund renewable energy projects and EV charging stations (Thailand)

The Asian Development Bank (ADB) has signed a 1.5 billion Thai baht ($47.62 million) green loan agreement to finance renewable energy projects and a nationwide electric vehicle (EV) charging network in Thailand. This is the first climate loan in Thailand to be certified by the Climate Bond Initiative, which administers the international Climate Bond Standards and Certification Scheme. The loan amount will be used to finance the Nakornsawan Solar and Hanuman Wind power plants, and deploy fast and standard chargers at charging stations across the country.

NTPC signs agreement to buy GAIL’s 25.51 per cent stake in RGPPL

NTPC Limited has signed a share purchase agreement to buy GAIL’s 25.51 per cent stake in Ratnagiri Gas and Power Limited (RGPPL). RGPPL was incorporated in 2005 and promoted by NTPC and GAIL (India). The company was set up to take over and revive the assets of the Dabhol Power Company. NTPC and GAIL held 25.51 per cent stake each in the Dabhol project. Once this transaction is complete, NTPC will hold 86.49 per cent stake in RGPPL. Meanwhile, NTPC has also sold 14.82 per cent stake in Konkan LNG Limited (KLL) on a fully diluted basis. (KLL owns and operates the LNG regasification terminal at Dabhol.) Once the transaction is concluded, NTPC will exit KLL.

Centre signs an agreement with AIIB for a $304 million loan to improve power transmission in Assam

The central government has signed an agreement with the Asian Infrastructure Investment Bank (AIIB) for a loan of $304 million (over Rs 22 billion) to improve the power transmission network in Assam. The funds will be utilised for the Assam Intra-State Transmission System Enhancement Project. The total estimated cost of the project is $365 million, of which $304 million will be financed by the AIIB and the rest by the state government. The AIIB loan has a maturity of 24 years and a five-year grace period.

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