Green Bonds – Introduction, Benefits and Issue – Investment Guide

Green Bonds: The current market for the investors have been for investing in the bonds, the bonds have been much reliable source and the bond issuance company has also got good credit rating which would increase the trust amongst the investors. The green bonds market has not been so popular in India but was globally accepted in the year 2007, but lately accepted in India. This article will brief you about the meaning of Green Bonds and what are the issues in it.

Green Bonds – Introduction, Benefits and Issue Details

What is meant by Green Bonds ?

The Green Bonds are the bonds which are given to the investors for raising the money but the only difference between the normal bond and the green bond is that the money raised from the bonds has to be compulsorily used for the projects of “green” energy or renewable resources.

As if there is no standard meaning of the term green bonds but it has been widely used in the market. The Green Bonds are such debt instruments which are used for funding the clean and non polluting projects.

Benefits of Green bonds:

  • It would attract a huge number of investor as there is very less market of green bonds in India. As the demand for Green Binds would increase in India, the creditability of green bonds will also increase and the interest rate for which it is allocated would also increase.
  • The reputation of the issuer of the bonds will also increase as the name of the issuer will be demanded in the market and thus will result in the goodwill.
  • Investors are always in the mood of mind that where to invest. If they get diversity in choosing the options where to invest then they would invest there. As these investments are the safest mode of subscription they are relating to the intoatoves by the government for clean energy. They are also rated very much high by the credit rating agencies.

Till Date Issued:

  • The first issuer of the green bonds in India is YES BANK. They brought there issue of green bonds in February, 2015. The issue brought by the Yes Bank was a 1000 Crore issue with a tenure of 10 years. It was over subscribed by two times and got huge response from the investors. This funds was going to be used for the renewable projects such as solar energy, wind energy and biomass projects. Seeing the huge success of the issue, YES BANK again brought the issue in August 2015 which was totally subscribed by International Finance Corporation. The issue size was 315 crore with 10 year maturity period.
  • Than came the issue of CLP India, of which the issue size was of 600 crore, bonds have been offered at an interest rate of 9.15 %. The bonds will be redeeming in 3 years time period yearly on April 2018, 2019 and 2020.
  • The next was the issue of IDBI BANK which brought the issue with the size of Dollar 350 million with a maturity period of 5 years. The surprising thing was that the issue was over subscribed by 3 times.
  • The EXIM bank of India also came up with the green bonds issue in March 2015 which was welcomed very nicely by the investors and it was also oversubscribed by around 3 times.

Recommended Articles

Join the Discussion