NTPC Subsidiary Invites Proposals for Green Term Loan of ₹90 Billion

The last date to submit the proposals is March 6, 2023


NTPC Green Energy, a wholly-owned subsidiary of NTPC, has invited proposals from banks for a green term loan of up to ₹90 billion (~$1 billion) to repay debt obligations towards NTPC against the acquisition of 15 renewable assets.

NGEL intends to repay the outstanding liability of ₹82 billion (~$990 million) and further intends to raise additional funds of approximately ₹8 billion (~$97 million) to clear the balance capital expenditure payments of projects which are yet to achieve commercial operation date.

The last date for the banks to submit the proposals is March 6, 2023.

The minimum loan to be offered by the banks or financial institutions is ₹10 billion (~$121 million).

The tenor of the loan is 15 years or more with a moratorium of 6 months from the date of the first drawl.

NGEL will repay the loan in equal half-yearly installments.

The proposals will be evaluated based on the lowest quoted rate of interest, irrespective of any benchmark.

NGEL aims to bolster NTPC goals by helping the latter’s renewable operational capacity reach approximately 12 GW by 2025 on a consolidated basis and further scale up to achieve 60 GW capacity by 2032.

To support the company’s green targets, NTPC incorporated NGEL in April last year and inked a business transfer agreement with the latter to transfer 15 solar and wind projects. The projects have a combined capacity of 2.8 GW.

Of the 15 renewable projects, 13 projects with 2.2 GW capacity are fully operational and the remaining two projects totaling 600 MW have attained an operational capacity of 350 MW.

The net worth of the 15 renewable energy assets is ₹13.7 billion (~$171.8 million) as of March 31, 2022, which is 1% of the net worth of NTPC, i.e., ₹1.4 trillion (~$17 billion).

The consideration for the transfer of the renewable energy assets has been set at ₹100.7 billion (~$1.26 billion) based on the book value as per the audited financials as of March 31, 2022, payable through a combination of cash, equity shares, and debt liability.

Earlier this month, NTPC invited bids to raise external commercial borrowing in the form of Tokyo Overnight Average Rate-linked unsecured term loan in Japanese Yen (JPY) equivalent to $150 million (~₹12.4 billion) plus a greenshoe option of JPY equivalent to $600 million (~₹49.6 billion).