Energy Efficiency Services (EESL) has made its maiden issuance of bonds in the domestic market to fund energy-efficiency projects in India. Domestic bonds worth Rs 500 crore were issued to investors on private placement basis at a coupon rate of 8.0 per cent per annum.
These bonds have been rated AA by ICRA and CARE. The maturity of the bonds ranges from 3.5 to seven years on STRPP basis. Meanwhile, Trust Investment Advisors is the sole arranger of the issue.
The access to Indian bond markets will be a key milestone for EESL to channelise more investments in the energy-efficiency market. For FY2016-17, the capex requirement of EESL is Rs 3,500 crore. Aiding this requirement, these corporate bonds will be the first of many tranches.
EESL is also planning to introduce Green Masala Bonds worth US$ 100 million (approx Rs 700 crore) in November. The company has also tied up funding from multi-lateral agencies like KFW, AFD and ADB for funding its energy-efficient projects.
According to Saurabh Kumar, Managing Director, EESL, “Our requirements from the markets is quite high; however, we are confident of a great response from investors looking at our unique model.”
EESL aims to unlock the energy-efficiency (EE) and demand side management (DSM) market valued at Rs 1.5 lakh crore, and implement large-scale EE projects. It seeks to create market access, particularly in the public facilities (municipalities, buildings, agriculture, industry, etc), implement innovative business models, handhold private sector energy service companies (ESCOs) to ensure replication.