India’s Tata Cleantech raises $25.6m from Dutch bank FMO via green bonds

Tata Cleantech Capital, a joint venture between Tata Capital and the International Finance Corporation (IFC), has raised Rs 180 crore ($25.6 million) through its maiden green bond issue from Dutch development bank FMO (Nederlandse Financierings -Maatschappij voor Ontwikkelingslanden N.V.).

According to an official statement, the bonds with a tenor of five years will be exclusively applied to finance eligible green projects. Green bonds are bonds earmarked to be used for environmental and climate-related projects.

“The Green Bond market plays a key role in funding projects that contribute to environmental sustainability. TCCL’s maiden green bond issue will finance eligible Green Projects in the renewable energy space,” said Manish Chourasia, Managing Director, Tata Cleantech Capital.

In May 2017, IFC had agreed to provide senior debt worth $40 million to Tata Cleantech Capital. IFC had subscribed to secured non-convertible debentures, structured as a green bond issued by the company.

Tata Cleantech is a non-banking financial company that provides finance and advisory services for projects in renewable energy, energy efficiency, waste management, water management and cash flow-based infrastructure finance.

“TCCL’s expertise lies in intermediating fund flows from domestic and international capital markets to the cleantech sector in India, providing avenues for profitable growth, through underwriting, syndication and advisory services,” said the company.

FMO is focused on supporting sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. It focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food and water.  It has a committed portfolio of $10.5 billion across 92 countries.

Recently, FMO had extended Rs 200 crore debt to Northern Arc Capital, which lends to impact-focused companies and also facilitates debt financing via rupee denominated non-convertible debentures (NCDs). The funds were to be issued in two tranches of Rs 100 crore each. Of this, one tranche has been classified as “green bonds”.

The Indian government has been trying to drive the growth of renewable energy in the country. It has set a target to achieve 175 GW of renewable power generation capacity by 2022. This includes 100 GW of solar and 60 GW of wind power capacity.

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