IFC, a member of the World Bank Group, today said it has invested Rs 667 crore in L&T Infrastructure Finance Company by subscribing to the first official green bonds in India. This investment of Rs 667 crore in line with IFC’s strategy to support renewable energy infrastructure in the country and also develop the capital markets, the company said in a statement. L&T Infrastructure Finance Company, a wholly-owned subsidiary of L&T Finance Holdings, will use this money to give loans to solar power projects, it said.
On May 30 this year, the Securities and Exchange Board of India issued norms governing green bonds. “L&T Infrastructure Finance is a leading financier to the renewable energy 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, capital intensive infrastructure projects,” Country Head for IFC in India, Jun Zhang, said.
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He also said India needs USD 2.5 trillion to meet its climate change mitigation targets by 2030 and the issue by L&T Infrastructure Finance to IFC qualifies as the first green bond approved by SEBI, and may catalyse other similar programs. IFC was one of the earliest issuers of green bonds, launching a green bond program in 2010 to help unlock investments for private sector projects that support renewable energy and energy efficiency.
The company, had earlier invested USD 50 million in Yes Bank and USD 75 million in PNB Housing Finance through instruments that would qualify as green bonds but were floated before the SEBI circular of May 30, it said. L&T Infrastructure Finance has been increasing its focus on renewable energy, which has come to comprise 37 percent of its total portfolio of Rs 22,774 crore, the release said. “This partnership with IFC will further diversify our funding profile and demonstrates the strength of our project appraisal and risk assessment capabilities for renewable energy lending,” said L&T Infrastructure Finance Chief Executive Virender Pankaj.