Green Bonds Issuance

State-owned non-banking finance firm REC Ltd on Saturday said it has raised USD 750 million (about Rs 6,138 crore) through issuance of green bonds. The net proceeds from the issue of the bonds will be applied to finance, in whole or in part, the eligible green projects in accordance with the approvals granted by Reserve Bank of India from time to time and in accordance with the ECB guidelines, according to a statement. "REC Ltd has successfully raised USD 750 million through 5-year 144A/ RegS green bonds under its global medium-term programme of USD 7 billion," the statement said. As a frequent issuer in the market and given the relatively stable market backdrop last week, the REC decided to capitalise on the environment to carry out an intra-day execution post extensive investor roadshows spanning two weeks in different geographies covering Singapore, the UK, and the US, it stated. The issue marks the REC's return to the capital market since 2021, with the last 144A transaction in

State-owned non-banking finance firm REC Ltd has raised USD 750 million through issuance of green bonds. The expected settlement date for these bonds is April 11, 2023. "REC Ltd under its USD 7 billion Global Medium Term Note Programme, has priced and issued USD 750,000,000; 5.625 per cent green bonds on April 3," according to a regulatory filing. These bonds will mature on April 11, 2028, and all principal and interest payments will be made in US dollars. The net proceeds from the issue of these bonds will be used in finance, in whole or in part, the eligible green projects, it stated. These bonds will be listed on Global Securities Market of India International Exchange (India INX) and NSE IFSC.

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Currently, NABARD is getting necessary certifications and approvals to comply with the market regulators' guidelines on green debt issuance, a company official said

Centre looks to raise Rs 16,000 cr this fiscal via green bonds. The Budget, however, does not say whether or not bond issuance will be the sole contributor to the fund

Dedicated ESG debt funds may be a key factor to help issuances grow

If this sovereign auction is over-subscribed and the cutoff yield materially lower than regular government bonds, it would encourage larger green issuance next year

The investments in green bonds can qualify towards statutory liquidity ratio (SLR) - the minimum percentage of deposits commercial banks are required to invest in liquid assets, such as government bon

The proceeds from the bonds will be deployed in public sector projects which help in reducing the carbon intensity of the economy, said RBI

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Capital markets regulator Sebi on Thursday said issuers of municipal debt securities can issue green bonds in compliance with rules governing issue and listing of non-convertible securities. A green bond is like any other bond where a debt instrument is issued by an entity for raising funds from investors. The proceeds of a green bond offering are 'ear-marked' for use towards financing green projects. Sebi (Issue and Listing of Municipal Debt Securities) or ILMDS rules provide the framework for issuance and listing of municipal debt securities. It also specified the continuous disclosure and compliance requirements to be complied with by issuers of Municipal Debt Securities. The ILMDS rules do not define 'green debt security'. However, Sebi's (Issue and Listing of Non-Convertible Securities) or NCS norms defines green debt security. Further the regulator, in 2021, came out with operational guidelines providing the initial and continuous disclosure requirements for entities issuing

Reserve Bank of India, the nation's debt manager, is preparing to sell its first ever batch of sovereign green bonds as early as next month, according to people with knowledge of the matter

Proceeds will be deposited in the Consolidated Fund of India

The framework is expected to cover funding of green and sustainable infrastructure across sectors such as roads, railways, urban transportation, and even agriculture and social sector

Green bonds are debt instruments the proceeds of which are utilised to finance projects that are beneficial to the environment

Green bond proceeds will be used to fund projects which will help India meet COP commitments

The Budget had indicated that green bonds are part of the overall borrowing for the next financial year

According to Moody's Investor Service, this expectation is based on the average annual rate of growth in green bond issuance since 2015

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