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HSBC India To Launch Green Bonds Soon

The Indian subsidiary of international banking giant HSBC is planning to issue its first green bond issue in the country this year.

HSBC India Chairman Naina Lal Kidwai recently announced that the bank will launch green bonds to raise funds for environmentally sustainable projects, and noted that HSBC is the world’s fourth largest issuer of green bonds, and now looking to tap the Indian market as well.

Some Indian private banks have already issued green bonds, while several others are planning to do so. Yes Bank has already raised close to $200 million through two rounds of green bond issues. Yes Bank’s first issue launched in February this year, and was also the first green bond issue in India. The issue was a resounding success, as the bank managed to raise twice the capital it had targeted.

The Indian Export-Import Bank also issued the country’s first dollar-denominated green bonds and it remains the largest issue till date. The Bank managed to raise $500 million.

A number of other private, public-sector, and government institutions are expected to launch green and tax-free bonds in the coming months. Financial institutions in India pledged $57 billion investment in renewable energy projects over the next 5-7 years at a government investors summit in February, and bonds are expected to play a critical role in meeting a bulk of that target.

In addition to green bonds, Kidwai also advocated the creation of yieldcos that allow project developers to bundle up renewable energy assets that can generate predictable cash flows and provide sense of security to the lenders. The concept of yieldco would work perfectly well in India where lenders are still apprehensive about investing in renewable energy projects.

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Written By

Smiti works as a senior solar engineer at a reputed engineering and management consultancy. She has conducted due diligence of several solar PV projects in India and Southeast Asia. She has keen interest in renewable energy, green buildings, environmental sustainability, and biofuels. She currently resides in New Delhi, India.


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