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International Finance Corporation (IFC), part of the World Bank Group, has invested ₹667 crore in green bonds sold by L&T Infrastructure Finance, it said in a statement. These are India’s first official green bonds.
L&T Infrastructure Finance is a wholly-owned subsidiary of L&T Finance Holdings, the financial services arm of engineering and infrastructure conglomerate L&T. It will use the funds to provide loans to solar power projects, the statement added. Renewable projects currently account for 37 per cent of the company’s total portfolio of ₹22,774 crore.
The transaction announced by IFC is the first investment in green bonds in India, norms for which had been put in place by the Securities and Exchange Board of India (SEBI) on May30.
SEBI ruled that those bonds whose proceeds are used for projects or assets involving renewable energy, clean transport, sustainable water/land management, climate change adaptation, and energy efficiency would qualify as ‘green’.
IFC had earlier invested $50 million in YES Bank and $75 million in PNB Housing Finance through instruments that would qualify as green bonds but were floated before SEBI’s circular of May 30.
The agency’s contribution to India’s renewable energy sector accounts for 15 per cent of the incremental capacity.
Lending to L&T Infrastructure Finance Company by subscribing to green bonds is in line with IFC’s strategy to support renewable energy infrastructure in India and developing capital markets.
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