Masala bonds in the UK can help state-run power companies raise nearly $1 billion, India's Minister for Power, Coal, Renewable Energy, and Mines, Piyush Goyal, said. The statement came in the backdrop of discussions on bilateral energy ties with his UK counterpart Greg Clark, Secretary of State for Business and Industrial Strategy,
Masala bonds are rupee-denominated papers issued by Indian corporates in overseas markets to raise funds. Both the countries involved in the meeting, reaffirmed commitment to anchor investments up to £120 million each in a joint fund, which aims to raise around £500 million. They also agreed that the fund will focus its initial investments on India's rapidly growing energy and renewables markets.
Sources said state-run generation utility NTPC is expected to raise another £200-300 million to fund capital expenditure. The company was the first Indian corporate to float 'green' masala bonds in August 2016 for £200 million. Power Finance Corporation too could be looking at raising another £200-300 million to fund expansion and modernisation of the country's transmission, distribution and generation infrastructure.
Other companies looking at offering masala bonds in the UK include transmission utility PowerGrid, Indian Renewable Energy Development Agency, Solar Energy Corporation of India and Energy Efficiency Services Ltd. All of them together could aggregate a mop-up of £100 million or so. But all of this money is not going to be raised at one go.“These are independent entities and their board decides such issues. They will hit the market as and when they deem fit,” a power ministry official said.
