The Indian Renewable Energy Development Agency (IREDA) has listed a five-year green masala bond on the London Stock Exchange’s new International Securities Market (ISM). The agency said that net proceeds from the $300 million green bond will be used to finance renewable energy projects across the country.
The International Finance Corporation coined the term “green masala bond” in August 2015, when it became the first institution in the world to issue an offshore green bond denominated in Indian rupees. The London Stock Exchange claims to be the largest masala bond centre in the world, with 42 listed bonds valued at more than $6 billion.
IREDA’s bond is certified by the Climate Bonds Initiative, an investor-focused not-for-profit organization that focuses on building transparent assurance frameworks for green bond investment. As a state-backed entity, IREDA promotes, develops and helps to finance renewable energy projects in India.
On its website, the London Stock Exchange said that IREDA’s planned issuance, as well as the establishment of a domestic rupee-denominated bond market in India, underscores growing trust among international investors in the Indian currency.
The new issuance is the fourth green bond to be listed by an Indian issuer on the London Stock Exchange. Axis Bank and NTPC issued bonds in 2016, raising about $500 million and $300 million, respectively. In June of this year, the Rural Electrification Corporation (REC) also raised $450 million with a bond issuance.
Along with London stock exchange (ISM), the bond will also be listed on Singapore Exchange.
Furthermore, Moody’s Investors Service, a credit rating agency, has assigned a Baa3 rating to IREDA’s green masala bond. Moody’s says rating outlook is stable.