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NTPC raises ‘largest ever’ Samurai loan for new projects

Samurai loans allow non-Japanese firms to tap into the investment capital available in Japan and borrow funds in yen, which is among the currencies with the lowest interest rates.

By: ENS Economic Bureau | New Delhi |
Updated: February 4, 2020 12:37:36 am
NTPC, NTPC Samurai loan, what is Samurai loan, NTPC projects, indian express It would also be invested in NTPC’s new hydro projects as well as projects using ultra-supercritical technology, which are plants that require less coal per megawatt-hour and, therefore, lead to lower carbon emissions.

India’s largest power generator NTPC Ltd Monday said that it has raised a $750 million-worth term loan in Japanese yen, claiming it to be the “largest ever” Samurai loan raised by any Asian corporate. The funds raised would be used towards implementing systems that would help the state-owned power giant bring about a “substantial” reduction in toxic sulphur oxide emissions.

It would also be invested in NTPC’s new hydro projects as well as projects using ultra-supercritical technology, which are plants that require less coal per megawatt-hour and, therefore, lead to lower carbon emissions.

Samurai loans allow non-Japanese firms to tap into the investment capital available in Japan and borrow funds in yen, which is among the currencies with the lowest interest rates. The cross border syndicated loan provides the borrower with capital to either enter the Japanese market or the ability to convert the proceeds into the firm’s local currency for use in existing operations.

NTPC said the loan was raised under the automatic route of RBI’s External Commercial Borrowing regulations and has been fully underwritten by the State Bank of India in Tokyo, Sumimoto Mitsui Banking Corporation in Singapore and Bank of India, Tokyo.

The facility has a door-to-door maturity of 11 years — the period within which the amount would have to be paid back — under two tranches.

“In an endeavour towards sustainable and cleaner environment, NTPC would utilise these loan proceeds to fund capex for installation of Flue Gas Desulphurization (FGD) system that helps in substantial reduction of SOx emission, new hydro projects and projects using ultra supercritical technology with low carbon emission,” stated NTPC in a release.

Finance Minister Nirmala Sitharaman Saturday said in her Budget speech that utilities running thermal power plants with high carbon emission levels are advised to close those plants with emissions above pre-set norms.

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