Green Bonds Current Affairs - 2020

NTPC to invest Rs. 50,000 cr to add 10GW Solar Energy Capacity by 2022

State-owned power giant NTPC Ltd. is planning to add 10 GW (gigawatt) of solar energy generation capacity by 2022. The project would entail an investment of around Rs.50,000 crore which will be funded mainly by green bonds. NTPC’s plans to add 10GW solar energy capacity assumes significance in view of country’s ambitious target of having 175GW of clean energy by 2022.

Key Highlights

For borrowing option, the company would mainly rely on Green Bonds which are offered for pure clean energy projects. It wants to raise money through domestic as well as overseas green bonds.

Currently, NTPC has installed renewable energy capacity of 920 MW (Megawatt), which includes mainly solar energy. It has also formulated a long-term plan to become a 130GW company by 2032 with 30% non-fossil fuel or renewable energy capacity. NTPC will be completing tendering of 2,300 MW of solar energy capacity by end of this fiscal year (2019-2020), and thereafter it has planned to add 4GW each in 2020-21 and 2021-22.

Way Forward

As NTPC intends to sell electricity to industrial and commercial consumers as well as at energy exchanges, it will be setting up solar energy projects without any long-term (for 25 years) power purchase agreements (PPA). Central Electricity Regulatory Authority (CERC), the power sector regulator has already approved real-time power market, which is expected to kick in by 1 April 2020.

NTPC would also set up some of its solar energy projects under scheme where it gets viability gap funding (VGF) to keep the tariff below Rs.3/unit level.

About NTPC Limited

It was formerly known as National Thermal Power Corporation Limited. It is an Indian Public Sector Undertaking (PSU), engaged in business of electricity generation and allied activities. It was founded in 1975 and was incorporated under Companies Act 1956.

IRFC’s green bonds: India INX lists 1st debt security at IFSC

The India International Exchange (India INX) has listed the Indian Railway Finance Corporation’s (IRFC’s) green bonds on its debt listing platform-Global Securities Market (GSM).

With this, IRFC green bonds became first debt security to be listed on exchange at International Financial Services Centre (IFSC) in Gujarat’s GIFT city. India INX’s GSM segment is India’s first debt listing platform. It allows raising funds in any currency of choice by both foreign and Indian issuers from investors across the globe.

Indian Railway Finance Corporation

IRFC is finance arm of Indian Railway. It raises financial resources for expansion and running through capital markets and other borrowings. It raises money mainly through financial bonds and from banks and financial institutions. In 2017, IRFC had raised $500 million from 10- year green bond from investors in Asia, Europe and offshore US through listing on the London Stock Exchange (LSE).

Green Bonds

Bonds basically are debt instruments which help issuer to get capital while the investors receive fixed income in the form of interest. In case of Green Bonds, the issuer gets capital from the investors only if investment (capital) is being raised to fund green projects relating to renewable energy or emission reductions etc.

India International Exchange (India INX)

Indai-INX is India s first international exchange at IFSC Gujarat International Financial Tech (GIFT) City, Gandhinagar. It is wholly-owned subsidiary of Bombay Stock Exchange (BSE), through its global bourse. It is one of the world’s most advanced and fastest trading technology platforms with turn-around time of 4 micro seconds. It will operate for 22 hours a day allowing international investors and NRIs to trade from anywhere across globe. It trades in equity derivatives, currency derivatives, commodity derivatives including Index and Stocks. It also offers depository receipts and bonds.