PFC Raises €300 M in First-ever Euro Green Bond Issuance

Power Finance Corporation Ltd (PFC), a leading non-banking financial company (NBFC) in the power sector, has successfully issued its maiden Euro 300 million 7-year Euro Bond issuance on September 13, 2021.

The pricing of 1.841% achieved is the lowest yield locked in by an Indian Issuer in the Euro markets, as per PFC’s release.

It is the first-ever Euro denominated Green bond issuance from India. Moreover, it is the first-ever Euro issuance by an Indian NBFC and the first Euro bond issuance from India since 2017.

The issuance saw a strong participation from institutional investors across Asia and Europe with a participation from across 82 accounts and was oversubscribed 2.65 times.

R.S. Dhillon, CMD, PFC said, “The overwhelming response to the issuance reflects international investor’s confidence in PFC. This issuance also demonstrates our commitment for achieving India’s renewable energy goals. Further, this bond issuance would help PFC in diversifying its currency book as well as the investor base.”

The news comes at an important time when institutions like Power Finance Corporation (PFC) and Rural Electric Corporation (REC) are being encouraged to fund climate welfare more. In a report released in May last year, 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 under the ownership of Ministry of Power, Government of India. Established in 1986, it is considered the financial backbone of Indian Power Sector. As per the financial results of Q4 FY21 released in June this year, the company witnessed a 49% jump in standalone profit after tax from FY ’20 and a 28% increase in net interest income from FY’20. “Aided by profit growth, PFC’s net worth for FY21 is up by 16% to Rs.52,393 cr. and has crossed the fifty thousand mark,” said PFC.