NHPC Limited (National Hydroelectric Power Corporation) has been actively involved in green financing

NHPC Limited (National Hydroelectric Power Corporation) has been actively involved in green financing


Introduction 1

Green Bond Issuances 2

Recent Developments 2

Investment Considerations 3

Bond Matured on 2 November 2023 (ISIN INE848E07542 4

Summary Table (per ₹100,000 investment over entire tenure) 4

Outcome: 4

Conclusion 5



Introduction

NHPC Limited (National Hydroelectric Power Corporation) is a Government of India enterprise under the administrative control of the Ministry of Power. It was incorporated in 1975 with the primary objective of developing and harnessing India's vast hydroelectric potential, and has since diversified into solar and wind energy projects. NHPC is a "Mini Ratna Category-I" Public Sector Undertaking (PSU) and is listed on the NSE and BSE. The Government of India holds a majority stake (over 70%) in the company. NHPC plays a crucial role in the nation’s renewable energy expansion, operating more than 7,000 MW of hydro capacity and actively participating in green financing initiatives such as green bonds to support clean energy projects.

NHPC Limited (National Hydroelectric Power Corporation) has been actively involved in green financing, including the issuance of green bonds, to support its renewable energy initiatives.(psuwatch.com)

Green Bond Issuances

  1. 8.78% NHPC Green Bond (ISIN: INE848E07450)
     This bond, maturing on February 11, 2025, is a dual-currency, variable-rate instrument categorized as a green bond. It is secured and guaranteed, with inflation-linked principal and coupon rates. The bond is designed for qualified investors in the CIS region and is listed on international platforms. It is also classified as a supranational bond issue, indicating its alignment with international green financing standards.

  2. 8.92% NHPC Tax-Free Bond (ISIN: INE848E07567)
     Issued on November 2, 2013, this bond offers an annual coupon rate of 8.92% and is tax-free under Section 10(15)(iv)(h) of the Income Tax Act. It is secured, senior in repayment, and has a maturity date of November 2, 2033. The bond is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

  3. 8.43% NHPC Tax-Free Bond (ISIN: INE848E07542)
     This bond was issued on November 2, 2013, with a coupon rate of 8.43% and is tax-free under Section 10(15)(iv)(h). It is a secured, redeemable, non-convertible bond with a maturity date of November 2, 2023. The bond is listed on both BSE and NSE.

Recent Developments

In March 2024, the Japan Bank for International Cooperation (JBIC) signed a loan agreement amounting to up to JPY 20 billion with NHPC Limited. Of this, JBIC's portion is JPY 12 billion, co-financed with MUFG Bank and the Bank of Yokohama. The loan is part of JBIC's GREEN operations and aims to support NHPC's renewable energy projects in India, including solar power initiatives. (jbic.go.jp)

Additionally, NHPC has been expanding its renewable energy portfolio. In November 2024, NHPC signed a Memorandum of Understanding (MoU) with the Global Green Growth Institute (GGGI) to advance clean energy initiatives in India. This collaboration focuses on projects such as floating solar, green hydrogen, and landscape restoration. (gggi.org)

Furthermore, NHPC has been actively involved in solar energy projects. In July 2024, NHPC signed a 25-year Power Purchase Agreement (PPA) with Jakson Green for a 400 MW solar capacity at a tariff of INR 2.53 per kWh. This project, located in Rajasthan, is expected to generate clean energy sufficient to power around 400,000 households annually and eliminate approximately 752,000 metric tons of CO₂ emissions per year. (gggi.org, pv-magazine-india.com)

Investment Considerations

NHPC's green bonds are considered attractive for investors seeking stable returns with a focus on sustainability. The bonds offer competitive coupon rates and are backed by NHPC's strong credit rating of 'AAA'. The tax-free status of certain bonds enhances their appeal to Indian investors. Additionally, NHPC's commitment to expanding its renewable energy portfolio aligns with global trends towards sustainable investing.(bondsindia.com)

Bond Matured on 2 November 2023 (ISIN INE848E07542

Here are the details for the bond that matured on 2 November 2023 (ISIN INE848E07542, 8.43% annual coupon):

  • Face value per bond: ₹1,000

  • Coupon rate: 8.43% paid annually

  • Issue size: ₹60.7698 crore (dezerv.in, dezerv.in)

  • Total interest received: For every ₹100,000 invested (100 bonds), investors received ₹8,430 each year from 2014 to 2022, totaling ₹75,870 in interest over nine years

  • Final redemption payment (principal + last interest): On 11 Feb 2023, investors received ₹175,870 per ₹100,000 invested:

    • ₹100,000 (principal) + ₹75,870 (aggregate interest)

Summary Table (per ₹100,000 investment over entire tenure)

Year(s)

Payment Description

Amount (₹)

2014–2022 (9 years)

Annual interest @ 8.43%

9 × ₹8,430 = ₹75,870

11 Feb 2023

Final redemption

₹175,870


– Principal

₹100,000


– Total interest earned

₹75,870

Outcome: 

Investors received full interest payments each year and the principal was returned at maturity. Both interest and principal were redeemed in full, indicating successful and timely redemption on 11 February 2023.

Conclusion

NHPC’s green bond initiatives underscore its commitment to sustainable energy development and responsible financing. As a government-owned entity with a strong credit profile and significant experience in the power sector, NHPC has effectively mobilized capital through green bonds to support hydro and solar energy projects across India. The successful maturity and repayment of its past green bonds not only demonstrate financial discipline but also build investor confidence in the viability and integrity of green investments led by Indian PSUs. NHPC continues to play a pivotal role in advancing India’s clean energy goals and attracting ESG-conscious investors.

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