Indian renewables agency strikes Bond with UK

The Indian Renewable Energy Development Agency (IREDA) has become the latest Indian entity to launch a new Green Masala Bond on the London Stock Exchange. The Indian Renewable Energy Development Agency (IREDA) listed new a new Green Masala Bond on International Securities Market (ISM) to raise funds to finance renewable energy projects across India. The five-year dated bond raised approximately $300 million (Rs 19.5 billion), with a coupon of 7.125 per cent, and became the first Green Masala Bond to be listed on the ISM. “IREDA is fully committed to helping achieve Indian Government's vision of 175 GW renewable energy capacity by 2022.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,” said Kuljit Singh Popli, Chairman and Managing Director of IREDA, at a special market opening ceremony at the London Stock Exchange on Friday, He 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 added. 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 bio energy sectors. “The IREDA Green Masala Bond illustrates government of India's commitment towards fostering the renewable and sustainable energy sector. Renewable energy will increasingly become the dominant force in energy generation, as we strive for 'Electricity for All' and achieve our mandate of 175 GW renewable energy capacity by 2022,” said Anand Kumar, Secretary, Ministry of New and Renewable Energy. 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 robust and 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. 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. Xavier Rolet, CEO, London Stock Exchange Group, said: “The listing of the first green masala bond on our new International Securities Market is a significant milestone that we are honoured to celebrate with Chairman Popli and his team. “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.” 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. The Exchange said it has been firmly committed to developing long-term strategic partnerships with issuers to ensure the success of this financing stream and help Masala Bonds evolve from specialist to a mainstream asset class. Jo Johnson, UK Minister of State for Universities, Science, Research and Innovation, said: “The London Stock Exchange is the largest, and greenest, in Europe and has helped position Britain as a world-leader in green finance. "The government is committed to building on this success and recently set out measures to draw on the expertise of the City to accelerate the growth of products like green bonds. We are committed to growing our economy while reducing emissions and recognise the huge opportunities presented by the unstoppable move to a low carbon economy.” London Stock Exchange said it is determined to support Green Bond issuances by supranational, municipal and private company institutions on its markets. LSEG is home to a number of global first Green Bond issuances from Bank of China and Agricultural Bank of China, India's Axis Bank, Development Bank of Japan and the IFC, a member of the World Bank Group. Green Bonds are fundraising tools created to fund projects that have positive environmental and climate benefits. [caption id="attachment_12073" align="alignleft" width="277"]

Indian Bonds at London Stock Exchange[/caption] Indian Bonds at London Stock Exchange • June 2017 - Rural Electrification Corporation's (REC) launches first ten year dated green bond raising $450 million • January 2017 - European Bank for Reconstruction & Development issues $62 million masala bond, the first in London and Europe in 2017 • September 2016 - British Columbia issues world's first Masala bond by a foreign government entity • August 2016 - NTPC, Indian energy conglomerate becomes first Indian green Masala bond issuer • July 2016 - HDFC lists world's first Masala bond by an Indian corporate • June 2016 - Axis Bank lists India's first internationally listed certified green bond & its entire $5 billion MTN programme • June 2016 - first Chinese sovereign RMB bond issued outside of China lists in London, bringing total number of offshore RMB bonds issued in 2016 alone in London to 54, more than all other offshore RMB markets combined • August 2015 - International Finance Corporation (IFC) issues world's first offshore green Masala bond, raising $52 million equivalent • February 2014 - IFC lists first Rupee denominated bond, going on to issue a further 3 Masala bonds in London over 2 years