(MENAFN- Investors Ideas) LONDON - August 5, 2016 (Investorideas.com Newswire) The Green Masala Bond issued this week by India's largest power utility NTPC Ltd (NTPC), is a international model of 'brown to green' financing.
The giant public power utility has issued an INR 20bn (USD 299m) Certified Climate Bond, dual listed on the London Stock Exchange (LSX) and Singapore Exchange (SGX), with the use of proceeds allocated to solar and wind power projects and associated transmission infrastructure in India.
NTPC has achieved a number of firsts with this bond:
First ever offering from India with both Green features and Masala bond structure First Climate Certified Bond by an Indian Public Sector Entity First Masala Bond by an Indian Public Sector entity
Climate Bonds Initiative CEO Sean Kidney:
"NTCP is providing a lead in brown to green financing, harnessing the strength of its existing balance sheet to fund expansion of clean energy generation. We need to see this model of financing for clean energy adopted and replicated again and again by the large fossil fuel companies."
"There is tremendous depth in the balance sheets of global energy. NTCP is rated as the 56th largest energy company in the world. How fast could we accelerate the low carbon energy transition if more top 100 energy companies issued green bonds against their brown assets to fund clean energy generation and infrastructure?"
"Institutional investors, the large pension funds, asset managers and insurers are looking to the global energy companies to shift their business models towards new growth opportunities in clean energy. Issuance of green bonds against their existing asset base would signal to these investors that energy company balance sheets were being geared towards long term, low carbon, value creation."
Receiving orders of over INR 29bn, the Certified Climate Bond attracted an oversubscription ratio of 1.45, with a strong response from high quality investors enabling NTPC to upsize the issue size from their original target amount of INR 10bn (USD 150m). The investor uptake was split between 80% Asset Managers, Insurers & SWFs, 15% to Banks, and 5% to Private Banks. Demand was strongest in Asia at 70% and 30% in the EU and Middle East.
Axis Bank, MUFG, HSBC and Standard Chartered Bank were the joint book-runners and lead managers for the transaction.
For more information, please contact:
Andrew Whiley, Communications Manager, Climate Bonds Initiative +44 (0) 7506 270 943
About Climate Bonds Initiative:
The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in the low-carbon economy.
About Climate Bonds Standard:
The Climate Bonds Standard encompass a multi-sector criterion that allows investors and intermediaries to easily assess the environmental integrity of bonds labelled as green and or funding low carbon development.
There are pre-issuance requirements, post-issuance requirements and a streamlined certification process to match the needs of mainstream debt capital markets.
Being certified under the Climate Bonds Standard means that the issuer is also fully aligned with the Green Bond Principles, also they will report regularly on the credentials of the bond, and an independent third party assurance has been provided.
About NTPC Ltd:
NTPC is India's largest power utility, supplying 25% of the nation's power with an installed capacity of 47.2MW of which 35.08 is coal based and 4.01 combined gas/liquid fuel. The organisation aims to be the largest power major in the world and has ambitious plans increase its renewable portfolio to 10GW, in furtherance of the Government of India target to achieve 175GW of renewable capacity by 2022. The NTPC Bond has been certified by the Climate Bonds Standards Board.
Read more about NTPC here.
A Masala Bond is an Indian Rupee denominated bond issued offshore e.g. on the London Stock Exchange (LSX).
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