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Source: This article is based on the article“REC Limited issues inaugural Yen Denominated Green Bonds aggregating to 61.1 Billion Japanese Yen” published in “PIB” on 16th January 2024.
Why in news?
Recently, State-owned REC Ltd has successfully issued its inaugural green bonds worth JPY 61.1 billion, under its US$ 10 billion global medium-term notes programme.
What are the salient features of the Yen Denominated Green Bonds?
Issued by: REC Limited, a Maharatna Central Public Sector Enterprise under the Ministry of Power
Purpose: To finance Eligible Green Projects, adhering to the Company’s Green Finance Framework and RBI’s External Commercial Borrowings Guidelines.
Investment grade: Baa3/BBB–/BBB+ (Moody’s/Fitch/JCR)
Listed on: Global Securities Market of India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar, Gujarat.
This issuance marks REC’s first venture into the Yen bond market and is notably the first Yen Green Bond issuance by an Indian PSU.
Significance of the issue
This issuance represents the largest ever Euro-Yen issuance in South and South East Asia, the largest Yen-denominated issuance from India, and the largest non-sovereign Yen-denominated issuance ever from the South and South East Asia.
6)The offering saw equal interest from Japanese and international investors, with international allocations being one of the highest for any Indian Yen deal.
What is green bond?
1) Green bonds are bonds issued by any sovereign entity, inter-governmental groups or alliances and corporates with the aim to utilise for projects classified as environmentally sustainable.
2) Green Bonds offer investors a platform to engage in good practices, influencing the business strategy of bond issuers.
3) Since 2008, the World Bank had issued approximately USD 18 billion equivalent in Green Bonds through over 200 bonds in 28 currencies.
UPSC Syllabus: Indian economy, environment
