India puts all its energy behind going green

India puts all its energy behind going green
India puts all its energy behind going green

India's state owned energy major, NTPC, recently celebrated its Green Masala Bond listing at London Stock Exchange (LSE), raising $300 million - double the initial target set. 'India Global Business' caught up with Kulamani Biswal, finance director of the company, in London to explore what lies behind this first ever Indian quasi sovereign's Masala Bond issuance, the proceeds from which will be invested in the renewable energy market in India. What does this first Green Masala Bond at the London Stock Exchange mean for NTPC NTPC is the largest power generating company in India. We have 47,228GW installed capacity - 16 per cent of India's total installed capacity - and we generate around 24-25 per cent of the total country's generation. Moving forward we are going towards 10GW solar power by 2022 in furtherance of government of India's programme to have 175GW by 2022. This initiative to raise money from the global market in terms of rupee is aimed at our solar projects. NTPC is the first corporate to go for Green Masala Bond and it is the first PSU [public sector unit] to raise money through this instrument. For the first time, we got it listed in the London Stock Exchange (LSE) and we received an overwhelming response from the investors. More than 66 accounts participated and the transaction was oversubscribed by 2.9 times. Initially, we had a plan to raise Rs 1,000 crores but looking at the interest of the investors, we have doubled it to Rs 2,000 crores [$300 million]. This reflects strong confidence in NTPC and the Indian market. How do you see this bond's trajectory It will be traded in both the Singapore Stock Exchange and London Stock Exchange. For the first time, we have got it certified by the Climate Bonds Initiative, which gives comfort to the investors that this money would be spent only for green purposes. We have projects already lined up; this year we are going to install 1GW in solar energy. We have recently completed 250MW in Ananathapuram, Andhra Pradesh, and another 250MW is under construction there. Then we have the Bhadla project in Rajasthan and Mandsaur in Madhya Pradesh - 250MW and 260MW respectively. In addition, we also plan to put up solar capacity in Karnataka, Rajasthan and UP. Our targets are on track and we are confident of meeting them with the help of this fund-raising internationally. How important are instruments like these in meeting India's renewables target

There is huge potential outside India for rupee-denominated bonds. The biggest advantage is that you get to avoid the currency risks because you are raising money in rupee terms outside India. At the same time, the investors get better returns. It is a win-win for all sides. The government has been proactive and consistently easing investment norms so that money can be raised through innovative instruments. Recently, they have also allowed bankers to raise money through this Green Masala Bond. We have a hydro station in operation, 800MW is in generation and is doing well and another 1,500MW is under construction. We don't have any wind capacity in our portfolio as of now but we are trying to acquire some wind assets. We are also looking at setting up Greenfield projects. It is in the due diligence phase. What actions is NTPC taking to meet the government's affordable power for all goal NTPC as a responsible generator is constantly trying to reduce its cost of generation so that cheap power can be made available to consumers. By coal rationalisation, we are trying to reduce our fuel cost. Similarly, we are going for international competitive bidding for our thermal projects so that capital cost per MW is reduced. We also always try for cheap finance to meet our funding requirements so that the ultimate burden on the consumer is reduced. What are your future plans for the international markets NTPC has one of the largest capex plans among any India PSU this year and in coming years. Our investment plan is worth Rs 30,000 crores [$4.5bn], out of which Rs 20,000 crores [$3bn] would be raised in the form of debt. We raise money from both the domestic as well as international markets. We have a plan to come again for dollar-denominated bonds within a month or two to meet our debt requirements for conventional source of energy. We can plan more Masala Bonds next year because already we have Rs 2,000 crore [$300mn] to spend. Once that is spent, we can look into the second tranche. London Stock Exchange is one of the most developed financial hub. We would like to list at New York also but for the time being, we are content going with LSE and Singapore. Our experience has been good - we have got some Middle Eastern investors for the first time in any book in India. What is your message for foreign investors looking to invest in India When you look at Asia, there are two countries - China and India. And, India is the largest democratic country and we have a stable and proactive government and it is expected that this year the GDP will grow at more than 7.5 per cent. This government is doing everything to attract international investors. It is the right time to think about putting money in India's infrastructure - not just power. India is the only emerging market with corporate governance at a high, established legal system and total transparency, which gives a lot of confidence to investors as to where the money is going. And with Brexit happening, Europe one is not sure about where it is going. The US has its own problems; worldwide yields have really fallen so India in such a situation offers a very safe haven for investments and good returns, much better than elsewhere.

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