NTPC raises Asia’s largest Japanese Yen loan worth $750 mn

New Delhi: State-run Maharatna Power PSU NTPC Limited, under the Ministry of Power, has signed a syndicated term loan in Japanese Yen, equivalent to $750 million. The facility is fully underwritten by the State Bank of India, Tokyo, Sumitomo Mitsui Banking Corporation, Singapore, and Bank of India, Tokyo, on January 20, and will be shortly launched by banks for general syndication, the power PSU said in a statement on Monday.

According to NTPC Limited, this is the largest-ever syndicated JPY loan raised by any Asian corporate from offshore Samurai loan market. The loan has been raised under automatic route of RBI ECB regulations and is also the highest-ever single foreign currency loan raised by NTPC. The facility has a door-to-door maturity of 11 years under two tranches.

This is the largest ever syndicated JPY loan raised by any Asian Corporate from offshore Samurai loan market: NTPC Limited

The loan proceeds shall be utilised by the company for funding its capex for the installation of Flue Gas Desulphurization (FGD) system, hydro projects and other projects using ultra-supercritical technology with low carbon emission. FGD system substantially reduces the SOx emission in the flue gases of thermal power plants and is a positive step towards sustainable operations and cleaner environment.

Since NTPC has some of the country's oldest thermal power plants, NTPC would need to install FGD and other emission control systems to meet new environmental norms. This is the third bond offering by NTPC from the international markets in financial year 2019-20. In 2019, it raised $450 million under its $6 billion Medium Term Note (MTN) Programme.

NTPC's $6 billion MTN Programme was set up in 2006 and this issuance was the 10th offering under the programme, taking the cumulative amount raised under the MTN Programme to US$ 4.30 billion. In May last year, it also raised Rs 4,300 crore through bonds at a coupon of 7.32 percent rate.  

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