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IIFCL To Raise Fund Via Green Bonds To Finance Renewal Energy Projects

India's Debut Sovereign Green Bond To Lower Its Financing Costs

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The state-owned India Infrastructure Finance Company Ltd. (IIFCL), said Friday that it is open to exploring green bond routes to raise funds for projects in the energy sector.


“Our subsidiary, IIFCL Projects, is a certifying agency for green bonds in India. We are now in the system. It is now up to us to see how we can further our green initiative and issue bonds. We would be open to it as long as the company has sufficient funds to invest in IIFCL bonds,” P R Jaishankar, Managing Director of IIFCL said.

The green bond is just like regular bonds, but the money raised by investors is used for projects that have a positive impact on the environment such as green energy or green buildings.

15% of the total company finance is currently going to renewal projects in the country.

He said that this percentage should increase as the government places a lot emphasis on renewable energy.

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Jaishankar stated that the company is exploring alternative investment funds (AIF) to diversify its funding sources.

IIFCL ventured for the first time in investing in infrastructure bonds issued by project companies last year.

IIFCL has invested Rs 975 Crore in project bonds. This includes Rs 325 Crore in bonds issued by InvITs, which are renewable energy infrastructure investment trusts.

He stated that IIFCL’s bond investment would not only improve the company’s assets but also increase the availability of long-term debt financing for infrastructure projects.

IIFCL is also looking at lending opportunities to Infrastructure Investment Trusts, InvITs, this year. This will help to strengthen the company’s balance sheet and improve asset quality, he said.

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