India’s largest power generation utility had earlier raised Rs.300 crore through these bonds as part of a larger plan of the National Democratic Alliance (NDA) government to raise Rs.5,000 crore for renewable energy.

Other state-owned firms, including Power Finance Corp. Ltd (PFC), Rural Electrification Corp. Ltd (REC) and Indian Renewable Energy Development Agency Ltd (Ireda) will also go down this road. While Ireda will raise Rs.2,000 crore, NTPC, PFC and REC will raise Rs.1,000 crore each.

Of the Rs.700 crore to be raised, 40%, Rs.280 crore, has been reserved for the retail sector. The issue will have three tenures of 10, 15 and 20 years and will open on 23 September.

The funds will help cut the cost of clean power for the utility, which has an ambitious capital expenditure target of 1.5 trillion till 31 March 2017. The earlier private placement of Rs.300 crore was oversubscribed by 7.25 times, according to K. Biswal, director, finance, NTPC.

The move comes at a time when NTPC is trying to reduce electricity tariff to improve power offtake from its projects. The utility undertook an exercise to keep its tariff to an average level of under Rs 3 a unit,Mint reported on 13 May.

In addition, NTPC aims to supply power at a uniform rate across the country.

“We have been trying (to supply power at a uniform rate across the country),” chairman and managing director A.K. Jha said at a media briefing on Monday.

NTPC’s average tariff of Rs.3.12 per unit is low, Jha said. However, it is for Central Electricity Regulatory Commission, India’s apex power sector regulator, to decide upon the rate.

In addition, NTPC also plans to raise $500 million each from its first global rupee and green bonds that it plans to sell soon. The $1 billion bond sale, approved by the board of India’s largest power producer, ties in with the government’s aim of raising low-cost funds to help finance its renewable energy objectives.

The Reserve Bank of India in April allowed companies to sell rupee-denominated bonds overseas, a move that it said will help Indian borrowers raise debt abroad without taking on currency risks.

NTPC has an installed capacity of 45,548 megawatts (MW) and a 17% share in India’s power generation capacity of 275,912MW. It plans to set up 10,000MW of solar power projects on its own. In addition, it is procuring 15,000MW on behalf of the government. The utility’s green power plans involve renewable energy contributing 28% of its planned capacity of 128,000MW by 2032.