Power Finance Corporation Issues India's First-Ever Euro-Denominated Green Bond

Power Finance Corporation Ltd (PFC), a financial institution under the Ministry of Finance, issued its maiden Euro Green Bond of £300 million (~$353 million) under the U.S. Global Medium Term Note Program. The bonds will have a tenor of seven years at a coupon of 1.841%.

The Notes will be listed on the Singapore Exchange Securities Trading Limited, NSE International Exchange, and India INX.

The settlement date is expected to be September 21, 2021. The principal and interest payments will be made in Euro. The issuance saw participation from institutional investors across Asia and Europe from 82 accounts and was oversubscribed 2.65 times.

The net proceeds from the issuance of these Notes will be utilized per the external commercial borrowing regulations of the Reserve Bank of India.


PFC said that this is the first-ever Euro-denominated green bond issuance from India. It is also the first-ever Euro issuance by an Indian non-banking financial company and India’s first Euro bond issuance since 2017.

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

PFC has been at the forefront of providing finances to India’s power sector, including renewables. The ₹900 billion (~$12.03 billion) stimulus package announced by the government for the power distribution companies is also routed through PFC. It approved ₹306.07 billion (~$4.09 billion) as of July 31, 2020, as part of the liquidity package for DISCOMs.

PFC is also one of the lenders from whom renewable energy developers obtain letters of undertaking used as bank guarantees in tenders. Such letters will serve the same purpose as a bank guarantee issued by any public sector bank. The terms and conditions would also be similar to any bank guarantee that promises to pay the procurer on demand within a given timeline.

In January 2021, PFC said it would raise ₹100 billion (~$1.36 billion) through bonds in two tranches. At least 75% of the proceeds would go towards lending and financing/refinancing existing debt and debt servicing.