The Indian Renewable Energy Development Agency (IREDA) is waiting for the approval of the Reserve Bank of India to issue green masala bonds having a tenure of five years to raise close to $300 million, a source said. A masala bond is a rupee-denominated bond issued in the overseas market. A green bond is used to raise money to fund green projects. The central bank recently issued a new notification stating that all proposals for issuing masala bonds have to be approved by it. “We are waiting for the central bank’s approval. As soon as we receive it, we will commence road shows. Earlier, such issues were under the automatic route. However, now one has to take the central bank’s approval,” the source said. The IREDA would be using the funds for fresh financing as well as refinancing of renewable energy projects. The company has hired six merchant bankers for the issue — YES Bank, ICICI Bank, Standard Chartered, HSBC, Barclays and Axis Bank. Once the company receives the central bank’s approval, road shows will start in Singapore, Hong Kong and London. The IREDA is looking to issue a Regulation S bond in which investors from Asia and Europe usually take part.
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In March this year, the company had issued a green bond in the domestic market to raise Rs700 crore. Recently, the National Highways Authority of India had issued masala bonds worth Rs3,000 crore at a coupon rate of 7.3%. NTPC had also issued masala bonds worth Rs2,000 crore at a coupon rate of 7.25%.