ADB Raises Rs.12.5 Billion in Largest Indian Rupee Green Bond
ECONOMY & POLICY

ADB Raises Rs.12.5 Billion in Largest Indian Rupee Green Bond

The Asian Development Bank (ADB) has achieved a significant milestone by raising ?12.5 Billion (~$150 million) through its latest green bond offering, solidifying its position with the largest Indian rupee bond issuance to date. This four-year currency-linked bond, listed on the Luxembourg Stock Exchange, carries a fixed interest rate of 6.72% annually and features a bullet repayment at maturity.

The proceeds from this landmark green bond will be directed towards financing ADB's private-sector renewable energy projects, emphasizing the institution's commitment to sustainable and environmentally friendly initiatives. The bond's structure is designed to support green financing, contributing to the global push for climate change mitigation.

Although denominated in Indian rupees, the bonds will be settled in United States dollars, with returns to investors linked to the performance of the rupee. This innovative approach aligns with ADB's strategy to encourage sustainable practices while navigating currency dynamics.

Having made its debut in the Indian rupee bond market in 2004, ADB has been an active participant, completing multiple "masala" bond structures and raising over $1 billion since 2014. ADB issued its first Indian rupee green bond in 2017, and the current offering marks the bank's return to the bond market after a three-year hiatus.

Pierre Van Peteghem, ADB's treasurer, emphasized the importance of sustainability in international capital markets, stating, "The ability to finance climate change projects with local currency green bonds represents the apex of our ambition while contributing to capital market development."

The successful issuance of this green bond was arranged by Standard Chartered Bank and garnered significant interest from a group of investors from the UK and the U.S. The appeal lay in the benchmark size for a local currency bond with a green theme, backed by a reputable multilateral development bank.

ADB's involvement in financing India's clean energy projects has been notable. In December of the previous year, ADB extended a $200 million loan to enhance Uttarakhand's electricity supply, facilitating the state's transition to clean energy sources. Additionally, a loan of $250 million was approved to strengthen India's power sector, focusing on improving the financial performance of electricity distribution companies and creating an environment conducive to private sector investment.

The successful green bond offering reaffirms ADB's commitment to sustainable finance and its pivotal role in supporting climate change projects through innovative financial instruments. As sustainability continues to drive international capital markets, ADB stands at the forefront, contributing to the development of capital markets while addressing critical environmental challenges.

The Asian Development Bank (ADB) has achieved a significant milestone by raising ?12.5 Billion (~$150 million) through its latest green bond offering, solidifying its position with the largest Indian rupee bond issuance to date. This four-year currency-linked bond, listed on the Luxembourg Stock Exchange, carries a fixed interest rate of 6.72% annually and features a bullet repayment at maturity. The proceeds from this landmark green bond will be directed towards financing ADB's private-sector renewable energy projects, emphasizing the institution's commitment to sustainable and environmentally friendly initiatives. The bond's structure is designed to support green financing, contributing to the global push for climate change mitigation. Although denominated in Indian rupees, the bonds will be settled in United States dollars, with returns to investors linked to the performance of the rupee. This innovative approach aligns with ADB's strategy to encourage sustainable practices while navigating currency dynamics. Having made its debut in the Indian rupee bond market in 2004, ADB has been an active participant, completing multiple masala bond structures and raising over $1 billion since 2014. ADB issued its first Indian rupee green bond in 2017, and the current offering marks the bank's return to the bond market after a three-year hiatus. Pierre Van Peteghem, ADB's treasurer, emphasized the importance of sustainability in international capital markets, stating, The ability to finance climate change projects with local currency green bonds represents the apex of our ambition while contributing to capital market development. The successful issuance of this green bond was arranged by Standard Chartered Bank and garnered significant interest from a group of investors from the UK and the U.S. The appeal lay in the benchmark size for a local currency bond with a green theme, backed by a reputable multilateral development bank. ADB's involvement in financing India's clean energy projects has been notable. In December of the previous year, ADB extended a $200 million loan to enhance Uttarakhand's electricity supply, facilitating the state's transition to clean energy sources. Additionally, a loan of $250 million was approved to strengthen India's power sector, focusing on improving the financial performance of electricity distribution companies and creating an environment conducive to private sector investment. The successful green bond offering reaffirms ADB's commitment to sustainable finance and its pivotal role in supporting climate change projects through innovative financial instruments. As sustainability continues to drive international capital markets, ADB stands at the forefront, contributing to the development of capital markets while addressing critical environmental challenges.

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