IFC subscribes to Rs. 6.67 billion of L&T Infrastructure bonds, India’s first official green bonds

By Wendy Van Sickle

Columbus, Ohio, July 6 – L&T Infrastructure Finance Co. Ltd. sold Rs. 6.67 billion of the first official green bonds in India to International Finance Corp., a member of the World Bank Group, according to a joint press release from the issuer and the subscriber.

On May 30, the Securities and Exchange Board of India (SEBI) released norms governing green bonds, stipulating that bonds that qualify as green are those whose proceeds are used for projects or assets of renewable energy, clean transport, sustainable water or land management, climate change adaptation and energy efficiency.

L&T Infrastructure’s are the first official green bonds sold since SEBI released its guidelines, but IFC previously invested $50 million in Yes Bank and $75 million in PNB Housing Finance through instruments that would qualify as green bonds, according to the press release.

Increasingly, L&T Infrastructure has been focusing on renewable energy – which has come to comprise 37% of its total portfolio – and will used proceeds of the green bonds to give loans to solar power projects.

“L&T Infrastructure Finance is a leading financier to the renewable energy sector, and this green bond subscription will serve as a catalyst for corporates to issue green bonds and provide the impetus for financiers to stay invested for a longer-term, which is essential for long-gestation, capital intensive infrastructure projects,” Jun Zhang, country head for IFC in India, said in the release.

India needs $2.5 trillion to meet its climate change mitigation targets by 2030.

IFC invests in financial institutions that fund climate change projects as well as directly in projects and companies.

L&T Infrastructure is a Mumbai-based non-banking financial company that provides financial products and services for power, roads, telecommunications, oil and gas and ports sectors in India.

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