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IREDA lists 5-year Green Masala Bond in UK

LiveMint logoLiveMint 30-09-2017 Aditi Khanna

London: The Indian Renewable Energy Development Agency on Friday 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 approximately $300 million (Rs19.5 billion), with a coupon of 7.125%, and became the first Green Masala Bond to be listed 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. 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. 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.

“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.

“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.

“The London Stock Exchange is the largest, and greenest, in Europe and has helped position Britain as a world-leader in green finance,” said Jo Johnson, UK Minister of State for Universities, Science, Research and Innovation. PTI

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