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Euro Green Bond

Posted on September 17, 2021 by admin1  29

In News 

  • Recently, Power Finance Corporation (PFC) launched its maiden €300 million 7-year Euro Green Bond issuance. 

About 

  • The issuance saw strong participation from institutional investors across Asia and Europe with participation from across 82 accounts and was oversubscribed 2.65 times.
    • The overwhelming response to the issuance reflects international investors’ confidence in PFC. 
    • This issuance also demonstrates a commitment to achieving India’s renewable energy goals. 
  • The pricing of 1.841 per cent achieved is the lowest yield locked in by an Indian issuer in the Euro markets.
  • It is not only the first Euro bond issuance by PFC but also the first-ever Euro-denominated Green bond issuance from India. 
    • Moreover, it is the first Euro issuance by an Indian non-banking finance corporation(NBFC) and the first Euro bond issuance from India since 2017.
  • Relevance 
    • This bond issuance would help PFC in diversifying its currency book as well as the investor base.

What is a Green bond?

  • A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects. 
  • These bonds are typically asset-linked and backed by the issuing entity’s balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations.?
  • Green bonds may come with tax incentives to enhance their attractiveness to investors.
  • The World Bank is a major issuer of green bonds.

Source: PIB

 
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