A five-year ‘masala bond’ issued by the Indian Renewable Energy Development Agency (IREDA) was listed on the London Stock Exchange on Friday, raising nearly $300 million (Rs 19.5 billion), with a coupon of 7.125%.
The green ‘masala bond’ on London Stock Exchange’s International Securities Market is certified by Climate Bonds Initiative, an international, investor-focused not-for-profit that helps build robust and transparent assurance frameworks around green bond investment.
IREDA, a state-owned company established as a non-banking financial institution, promotes, develops and extends 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 bio-energy sectors.
The money raised from its green bond will go towards financing renewable energy projects across India. This is the fourth green bond by an Indian issuer to be issued on London Stock Exchange.
Axis Bank and NTPC joined in 2016, raising the equivalent of $500 million and $300 million. In June, REC raised $450 million, the exchange said.
In 2015, London Stock Exchange launched its dedicated green bond segments creating strict admission criteria aligned with ICMA’s Green Bonds Principles. There are 48 green bonds listed in London that have raised more than $13 billion in aggregate terms across seven currencies.
Ten new green bonds have been listed on the London Stock Exchange in 2017 alone.
Kuljit Singh Popli, chairman and managing director of IREDA, was present at the open trading on Friday morning, along with Anand Kumar, secretary in the ministry of new and renewable energy, and Jo Johnson, UK minister of state for universities, science, research and innovation.
Xavier Rolet, CEO of the London Stock Exchange Group, said: “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.”
Popli added: "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 expansion…The overwhelming response to the issue is a testament to the confidence of global investors in IREDA and the Indian renewable sector in general.”
IREDA’s green bond is the latest in a long line of global firsts for London Stock Exchange Group, including numerous high profile Indian and green bond issuances on London Stock Exchange.
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12 December 2017