India’s Power Finance Corporation Limited (PFC), a non-banking financial company (NBFC) in the electricity sector, has launched its first Euro 300 million seven-year Euro Bond issuance. As per the reports, the 1.841 per cent pricing attained is the lowest yield locked in by an Indian issuer in the Euro markets.
The announcement marks India’s first-ever Euro-denominated green bond issue. Furthermore, it is an Indian NBFC’s first-ever Euro issuance, as well as India’s first Euro bond issuance since 2017. The issuance drew a large number of institutional investors from Asia and Europe, with participation from across 82 accounts, and was oversubscribed 2.65 times. The bond issuance will help PFC in diversifying its currency book as well as its investor base.
Government undertakings including PFC and the Rural Electric Corporation (REC) are being encouraged to fund more climate welfare projects. In May 2020, the Institute for Energy Economics and Financial Analysis (IEEFA) suggested that instead of backing obsolete & uneconomical coal-fired power plants that could soon become stranded assets, state-owned power sector lender, PFC should lend more to support renewable energy capacity addition.
PFC is an Indian financial institution that is owned by the Ministry of Power of the Indian government. It was founded in 1986 and is regarded as the financial backbone of the Indian power sector. According to the company’s financial figures for the fourth quarter of the financial year 2021, the company saw a 49 per cent increase in standalone profit after tax and a 28 per cent increase in net interest income as compared to the same period last year.