Out-Law News 1 min. read
21 Aug 2015, 3:28 pm
The bond, which was issued by World Bank subsidiary the International Finance Corporation (IFC), is worth 31.5 billion rupees (approximately £31 million). The proceeds will be invested in suitable projects via Yes Bank, one of India's largest commercial banks.
Harriet Baldwin, economic secretary to the UK Treasury, said that the "landmark" bond issue would further cement the UK's position as the leading global financial centre.
"As home to both a rapidly growing offshore rupee market, and a rapidly growing green bond market, our financial sector continues to be at the forefront of global trends," she said. "That's good for the UK, and for our trading partners across the world."
Green bonds, also known as climate bonds, are a relatively new asset class issued in order to raise finance for climate change solutions.
The new green bond will be the 12th rupee-denominated bond to be listed on the LSE. Previous issuers include the IFC, the European Bank for Reconstruction and Development and the Inter-American Development Bank. Together, these bonds will have raised a combined total of around £1.9 billion to fund Indian infrastructure.
IFC is part of the World Bank Group. It provides advice and investment to help the private sector find solutions to development issues. The green bond is part of IFC's ongoing offshore 103 billion (approximately £1 billion) rupee bond programme, which also included the 10-year, 10 billion rupee-denominated bond issued in November that was the first so-called 'Masala' bond listed on the LSE.
"Addressing climate change is a priority for IFC in India," said Jingdong Hua, its vice president and treasurer.
"IFC's green Masala bond demonstrates the powerful role of capital markets in mobilising savings for climate finance - and a listing in London allows us to attract the widest possible range of international investors. Adding the rupee as a new green bond currency also supports our goals to strengthen this important asset class."