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Yes Bank Green 16–24 February INR 1,000 crore 10 years AA+ (Indian credit
Infrastructure Bond 2015 USD 500 million 5 years rating)
EXIM Bank 5-year March 24, 2015 Rated as ‘BBB-’
Eurodollar Reg S by Standard and
Green Bond Poor’s and ‘Baa3’
by Moody’s, same
as the rating of
Govt. of India.
Sources: YES Bank (2015), EXIM Bank of India (2015), and Upadhyay (2014)
EXIM Bank’s bond issue was India’s first USD denominated green
bond while Asia’s first benchmark-sized green bond in 2015 and also
the third ever green bond outside Asia. EXIM will use the net proceeds
from the sale of the notes to fund eligible green projects in countries
including Bangladesh and Sri Lanka (EXIM Bank of India 2015).
According to the Climate Bonds Initiative, an organization seeking
to mobilize the world’s USD 100 trillion bond market for climate-
change solutions, green bonds raised USD 36.6 billion globally by the
end of 2014, which is triple the 2013 figure. However, the market for
green bonds is still at a very nascent stage. A study by the Bloomberg
New Energy Finance, titled Green Bonds Market Outlook, 2014,
mentions that the global green bond issuance in 2013 was just about
1 per cent of the value of the US corporate bond issuance, which was
over USD 1.4 trillion (BNEF, 2014). The forecast done by the Climate
Bonds Initiative is encouraging though. The market is expected to
reach USD 100 billion in 2015 and to treble again in 2018 (Wong 2015) .
Currently, options for investing in clean energy are limited. Also,
a joint Climate Policy Initiative-Indian School of Business study found
that high interest rates and unattractive terms under which the debt
is available in India, raises the cost of renewable energy by 24–32 per
cent compared to the US and Europe (CPI-ISB, 2012). Capability of
green bonds to tackle these issues has been proven to some extent.
The recently launched green bonds not only received better sovereign
ratings than their unclassified predecessors issued some time back but
were also offered over larger tenures. Consequently, they met with
great investor euphoria.
With lower than expected bank credit for renewable energy projects,
Non-banking financial companies can fill the gap for the required
credit. Tata Cleantech, the clean energy lending arm of Tata Capital,
for instance, is looking to become an infrastructure finance company
so that it can obtain foreign funding for renewable power projects
(Upadhyay 2015). Other such companies, like L&T Infrastructure
260 Low Carbon Development in China and India
Infrastructure Bond 2015 USD 500 million 5 years rating)
EXIM Bank 5-year March 24, 2015 Rated as ‘BBB-’
Eurodollar Reg S by Standard and
Green Bond Poor’s and ‘Baa3’
by Moody’s, same
as the rating of
Govt. of India.
Sources: YES Bank (2015), EXIM Bank of India (2015), and Upadhyay (2014)
EXIM Bank’s bond issue was India’s first USD denominated green
bond while Asia’s first benchmark-sized green bond in 2015 and also
the third ever green bond outside Asia. EXIM will use the net proceeds
from the sale of the notes to fund eligible green projects in countries
including Bangladesh and Sri Lanka (EXIM Bank of India 2015).
According to the Climate Bonds Initiative, an organization seeking
to mobilize the world’s USD 100 trillion bond market for climate-
change solutions, green bonds raised USD 36.6 billion globally by the
end of 2014, which is triple the 2013 figure. However, the market for
green bonds is still at a very nascent stage. A study by the Bloomberg
New Energy Finance, titled Green Bonds Market Outlook, 2014,
mentions that the global green bond issuance in 2013 was just about
1 per cent of the value of the US corporate bond issuance, which was
over USD 1.4 trillion (BNEF, 2014). The forecast done by the Climate
Bonds Initiative is encouraging though. The market is expected to
reach USD 100 billion in 2015 and to treble again in 2018 (Wong 2015) .
Currently, options for investing in clean energy are limited. Also,
a joint Climate Policy Initiative-Indian School of Business study found
that high interest rates and unattractive terms under which the debt
is available in India, raises the cost of renewable energy by 24–32 per
cent compared to the US and Europe (CPI-ISB, 2012). Capability of
green bonds to tackle these issues has been proven to some extent.
The recently launched green bonds not only received better sovereign
ratings than their unclassified predecessors issued some time back but
were also offered over larger tenures. Consequently, they met with
great investor euphoria.
With lower than expected bank credit for renewable energy projects,
Non-banking financial companies can fill the gap for the required
credit. Tata Cleantech, the clean energy lending arm of Tata Capital,
for instance, is looking to become an infrastructure finance company
so that it can obtain foreign funding for renewable power projects
(Upadhyay 2015). Other such companies, like L&T Infrastructure
260 Low Carbon Development in China and India
