India’s Renewables Agency Lists Green Masala Bond In U.K.
IREDA becomes fourth Indian company to issue green bonds.
The Indian Renewable Energy Development Agency has launched a new green masala bond on the London Stock Exchange's new International Securities Market to raise funds to finance renewable energy projects across India.
The five-year dated bond raised around $300 million (Rs 19.5 billion), with a coupon rate of 7.125 percent, becaming the first green bond to be issued by an Indian firm on the International Securities Market (ISM).
"Indian Renewable Energy Development Agency (IREDA) is fully committed to helping achieve Indian Government's vision of 175 GW renewable energy capacity by 2022,” said Kuljit Singh Popli, chairman and managing director of IREDA, at a special market opening ceremony at the London Stock Exchange.
The Green Masala Bond is a significant milestone for IREDA in this regard, as we embark on the next phase of renewable and sustainable energy led expansionKuljit Singh Popli, Chairman and Managing Director, IREDA
Popli described the listing as a step towards Prime Minister Narendra Modi's commitment to the Paris agreement on Climate Change. "The overwhelming response to the issue is a testament to the confidence of global investors in IREDA and the Indian renewable sector in general," he said.
IREDA, a state-owned non-banking financial institution, has a remit to promote, develop and extend financial assistance for renewable energy and energy efficiency conservation projects in India.
The company provides financing for hydro, wind and solar energy projects, new and emerging technologies and for bio energy sectors. Advancements in technology and a drop in the price of solar and wind energy have set India on the course to not only achieve its renewables target, but exceed it, he noted.
The new green bond is certified by Climate Bonds Initiative, an international, investor-focused not-for-profit, which helps build transparent assurance frameworks around green bond investment.
It marks the fourth green bond by an Indian issuer to be issued on London Stock Exchange. Axis Bank and NTPC joined in 2016, raising respectively $500 million and $300 million equivalent. In June this year, the Rural Electrification Corporation (REC) raised $450 million.
"There is an indisputable shift in momentum in green and sustainable financing across the world and London Stock Exchange Group is proud to be spearheading the growing global green and sustainable financing movement, developing innovative products and services in partnership with our customers," said Xavier Rolet, CEO, London Stock Exchange Group.
London Stock Exchange claims to be the largest Masala Bond centre globally, with 42 bonds listed in total with an equivalent value of over $6 billion.