NTPC likely to issue green bonds to raise funds for THDCIL, NEEPCO acquisition
New Delhi: State-run power giant NTPC is likely to raise around Rs 10,000 crore through green bonds for acquisition of the government's stake in THDC India Ltd (THDCIL) and North Eastern Electric Power Corporation Ltd (NEEPCO), a source said.
Proceeds from green bonds are used to finance clean and green and environment-friendly infrastructure. Since THDCIL and NEEPCO are hydro-power generators, any investment in these two firms would fall in the category of green bonds.
"The company is most likely to raise over Rs 10,000 crore via green bonds to acquire government stake in THDCIL and NEEPCO. The acquisition is likely to be before the end of this fiscal as the government intends to achieve its disinvestment target of Rs 1.05 lakh crore," the source said.
"The company has not started the process to appoint a valuer to fix the value of the central government stake in THDCIL and NEEPCO," the source added.
Earlier this week, the Cabinet Committee on Economic Affairs (CCEA) approved a proposal of the finance ministry for divestment of central government stake in THDCIL and NEEPCO.
Government of India's shareholding of 74.23 per cent in THDCIL will be divested along with transfer of management control to NTPC.
Similarly, the government's shareholding of 100 per cent in NEEPCO will be divested along with transfer of management control to NTPC.
According to the company's annual report, NEEPCO's net worth as on March 31, 2019 was Rs 6,301.29 crore.
The net worth of THDCIL was Rs 9,280.78 crore as on March 31, 2019.
The source said the size of the deal for acquisition of government share in THDCIL and NEEPCO has been worked out to be around Rs 10,000 crore after necessary adjustments like debt and other charges. The acquisition will be in line with NTPC's objective of having 30 per cent renewables out of 130 GW of total envisaged power generation capacity by 2030. At present, the NTPC Group has around 57 GW of power generation capacity. According to NEEPCO's website, the company operates seven hydro, one solar and three thermal power stations with a combined installed capacity of 1,457 MW.
NEEPCO also has one 600 MW hydro power project under development. It is scheduled for commissioning in 2019-20 fiscal.
THDCIL's total installed power generation capacity is 1,513 MW. It has two hydro power generating stations — Tehri (4X250 MW) and Koteshwar (4X100 MW) and two operational wind power plants in Gujarat — one at Patan (25X2 MW) and another at Devbhumi Dwarka (30X2.1 MW).