India: IFC invests $103 million in L&T unit’s green bonds

Photo: Mint

International Finance Corp (IFC), a member of the World Bank Group, on Thursday said it has bought green bonds worth Rs667 crore ($103 million) sold by L&T Infrastructure Finance Co. Ltd, a subsidiary of L&T Finance Holdings Ltd.

L&T Finance Holdings, part of the Larsen & Toubro group, offers financial products and services across rural, housing and wholesale finance sectors.

This is the first such sale after the Securities and Exchange Board of India (Sebi) on 30 May notified rules for issuing green bonds, the statement said.

Bonds, the proceeds of which will be used for projects in renewable energy, clean transport, climate change adaptation, energy efficiency, and sustainable water and land management, qualify as green bonds.

The funds will be used by L&T Infrastructure Finance to provide loans to solar power projects. Renewable energy comprises 37% of the company’s total loan portfolio of Rs22,774 crore ($3.51 billion).

“This partnership with IFC will further diversify our funding profile and demonstrate the strength of our project appraisal and risk assessment capabilities for renewable energy lending,” said Virender Pankaj, chief executive, L&T Infrastructure Finance.

In the last five years, IFC has invested about $1.2 billion in climate-friendly projects through direct investments in India. This includes its investments in green debt instruments of $50 million issued by Yes Bank Ltd and $75 million in PNB Housing Finance, a housing finance company promoted by Punjab National Bank. IFC, along with the Tata Group, has created Tata Cleantech Capital Ltd, an infra finance company, in India. Tata Cleantech Capital Ltd has given $170 million in wholesale investments to financial intermediaries that supports the climate change program in the country.

“L&T Infrastructure Finance is a leading financier to the renewable sector and this green bond subscription will serve as a catalyst for corporates to issue green bonds and provide the impetus for financiers to stay invested for a longer-term, which is essential for long-gestation and capital intensive infrastructure projects,” said Jun Zhang, India head for IFC.

The funds will be used by L&T Infra Finance to give loans to solar projects.

Also Read:

India: IFC to provide up to $40m debt to Tata Cleantech Capital

India: PNB Housing Finance to raise $75m from IFC via green bond issue

This article was first published on LiveMint.com.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.