Indian Railway Finance Corporation Ltd (IRFC) entered into rupee term loan (RTL) agreement with NTPC Renewable Energy Limited (NTPC REL), a wholly-owned subsidiary of NTPC Green Energy Ltd (NTPC GEL), for ₹5,000 crore. This loan will support NTPC REL’s ongoing and new capacity expansion projects as well as refinancing its existing debt.
Key Highlights of Agreement
Regulatory Compliance:
- The agreement was disclosed in a regulatory filing by IRFC under Regulations 30 and 51 of the SEBI (LODR) Regulations, 2015.
Purpose of Loan:
- Capital Expenditure: Funds will be used to finance a portion of NTPC REL’s capital expenditure for both ongoing and new capacity expansion projects.
- Refinancing: A portion of the funds will be allocated for refinancing NTPC REL’s existing loans.
Terms of Loan:
- The rupee term loan is unsecured.
- NTPC REL has provided a negative lien with specific exceptions, ensuring that certain assets cannot be pledged elsewhere.
- There is no equity holding between IRFC and NTPC REL, and no special rights or director appointments are involved.
- The loan amount has not been disbursed yet.
About NTPC Renewable Energy Ltd (NTPC REL)
Establishment & Purpose:
- NTPC REL was established on October 7, 2020 to drive NTPC’s renewable energy growth and support India’s transition toward a sustainable future.
- It operates as a subsidiary of NTPC Green Energy Ltd (NTPC GEL) and is focused on raising funds for capacity additions in renewable energy projects.
Recent Developments:
- The announcement of the loan agreement came shortly after NTPC Green received approval from the Rajasthan Renewable Energy Corporation Ltd to commence the final phase of the 320-megawatt Bhainsara Solar PV Project in Jaisalmer.
Significance of Agreement
- Strengthening Renewable Capacity: The loan will facilitate the expansion of renewable energy capacity under NTPC REL, bolstering India’s efforts toward a sustainable energy future.
- Financial Restructuring: Refinancing existing loans will help NTPC REL improve its financial health and operational efficiency.
- Support for Sustainable Development: This agreement underscores India’s commitment to expanding its renewable energy infrastructure while ensuring effective capital management in the sector.