India’s REC Raises $450m With First Green Bond

Rural Electrification Corp Launches Climate Bonds Initiative At London Stock Exchange
02:38 AM (Beijing Time) - 05. July 2017

Key Takeaways

  • Rural Electrification Corp (REC) of India has raised $450 million through green bonds
  • This is the first green bond offering from REC and the first green bond on London Stock Exchange’s new International Securities Market
  • The Climate Bonds Initiative proceeds will be used to finance environment friendly projects in India including solar, wind and biomass among others
  • Asian investors made up 68% of the order book, the rest came from EMEA region

India’s Rural Electrification Corp (REC) has raised $450 million through green bonds. This is the first green bond offering from the state-run entity. It is also the first green bond on London Stock Exchange’s (LSE) new International Securities Market (ISM).

The 10-year bond raised $450 million on the LSE with an annual yield of 3.965%. As per LSE, it was 3.9 times oversubscribed on the final order book. Asian investors made up 68% of the order book, the rest came from the EMEA region.

The company will use the proceeds of the Climate Bonds Initiative to finance environment friendly projects in India, including solar, wind and biomass.

This certified bond will help bring green energy to rural Indian villagers, clean power to where it’s needed most,” said Sean Kidney, CEO and co-founder of Climate Bonds Initiative. Adding, “Institutional investors backing long term carbon friendly projects is what we need to see replicated on a grand scale. Listing on London Stock Exchange gives exposure to global capital pools, an essential ingredient to reach India’s climate finance goals.”

REC finances and promotes power sector projects in India. It also provides financial assistance to various state and central power utilities, private sector project developers among others.

Previously, other Indian companies and banks have launched their green bonds, such as state-backed National Thermal Power Corporation (see NTPC Issues Green Masala Bonds). A research report in November 2016 stated that India may be able to support the funding needs of its renewable energy projects through green bonds (see Green Bonds In India).

 

Anu Bhambhani

Anu Bhambhani is the News Editor of TaiyangNews

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Anu Bhambhani