India’s first green bond issue received an overwhelming response as the issuer bank managed to raise twice the targeted amount.
Yes Bank, a private-sector bank in India, has raised about $150 million through India’s first green bond issue. The bank had announced the bond issue during the recently concluded RE-INVEST international renewable energy investors summit at New Delhi. Yes bank had targeted to raise about $80 million, which would be used to provide debt financing to renewable energy projects with a total generation capacity of 5 GW. The additional capital raised by the bank may allow it to double its commitment towards financing renewable energy projects in India.
KPMG will provide assurance services on an annual basis to validate that the funds raised by the bond are being used as per green bond principles.
The green bond issue clearly shows that Yes Bank is looking to significantly expand its exposure to the renewable energy sector. Last year, the International Finance Corporation (IFC) had provided a loan of $100 million through Yes Bank to an Indian wind energy project developer for a 170 MW wind energy project.
Green bonds is a significantly large market internationally, with the World Bank among the largest players. Green bonds worth a total of $35 billion were issued in 2014. However, India has not seen any activity in this domain. The launch of this green bond, from a private bank, no less, proves the growing confidence in the Indian renewable energy sector.
The RE-INVEST summit also saw India’s largest bank, State Bank of India, commit to providing $12.5 billion in debt funding to 15,000 MW renewable energy projects.
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