The National Thermal Power Corporation (NTPC) announced that it had raised a syndicated loan worth $750 million (~₹53.5 billion) in Japanese Yen to fund capital expenditure for the installation of Flue Gas Desulphurization (FGD) systems.

Flue gas desulphurization is a process of removing sulfur dioxide from exhaust flue gases of fossil-fuel power plants, and sulfur oxide emissions from processes like the incineration of waste material.

The power generator said this that was the largest syndicated loan in Japanese Yen by any Asian corporate from the offshore Samurai loan market. It also said that this was the highest ever single foreign currency loan raised by the NTPC.

The NTPC said that the loan was raised under the automatic route of the Reserve Bank of India’s (RBI) External Commercial Borrowings (ECB) regulations and has been fully underwritten by the State Bank of India, Tokyo; Sumitomo Mitsui Banking Corporation, Singapore; and the Bank of India, Tokyo.

A syndicated loan is a type of business loan where two or more lenders provide loans for one or more borrowers on the same loan terms and with different duties, but sign the same loan agreement.

In February last year, the Ministry of Power proposed a ₹835 billion ($11.70 billion) plan to meet the cost of development of Flue Gas Desulfurization to improve air quality and to conform to new norms notified by the Ministry of Environment Forest and Climate Change for power projects. Even during her budget 2020 speech, the finance minister said that old thermal plants would be asked to shut down if their emission is above the pre-set norms.

Recently, Mercom reported that the Indian Prime Minister Narendra Modi’s office has proposed waiving the Goods and Services Tax (GST) Compensation Cess, (earlier called the Clean Energy Cess which was India’s version of carbon tax) on coal to reduce the financial strain on distribution companies, besides helping the thermal power projects install FGD systems to curb pollution.