Energy PSUs to float $1 billion masala bonds

NEW DELHI: Public sector companies including NTPC, Power Finance Corp and Rural Electrification Corp are likely to float rupee-denominated debt instruments, or masala bonds, in the UK to raise $1billion in next three-to-four months to fund the country's ambitious renewable energy plans.

“Companies including NTPC, Neyveli Lignite Corp, Power Finance Corp, Power Trading Corp and Rural Electrification Corp are likely to launch these masala bonds totalling $1 billion (about Rs 6,600 crore) in the next three or four months in the UK to gauge the investor appetite," Power Minister Piyush Goyal said on Wednesday.

The tenor of these bonds is likely to be limited to a band of five to seven years and these are going to be in smaller denominations ranging from $150-250 million, or about Rs 990-1,650 crore.

These will be subject to decisions made by the boards of the PSU energy companies, he said. In addition, Energy Efficiency Services Ltd could explore issuance of green Masala Bond subject to credit rating, Goyal said at a round table on ‘Financing Renewables and Energy Efficiency’ in London. Indian Renewable Energy Development Agency Ltd (IREDA) is also coordinating a $1-billion equity fund in the renewable space.