The Asian Development Bank (ADB) announced this week that it has raised Rs.3 billion (~$47 million), from a new issue of offshore Indian Rupee-linked bonds in an effort to finance climate change mitigation and adaptation projects in India.

According to the Asian Development Bank, established in 1966 to foster economic growth and cooperation across the region, revealed that they had raised $47 million from an offshore bond issue with a 6 percent interest rate that matures in February of 2021. The Indian Rupee-denominated bonds will be settled in US Dollars, and were underwritten by JP Morgan and TD Securities, acting as Joint Lead Managers, and were placed with investors in Asia, Europe, and the Americas.

The proceeds that were raised from the bond issue have been earmarked alongside investments from the Japan International Cooperation Agency’s (JICA) Leading Asia’s Private Sector Infrastructure Fund (LEAP) for investment into India’s ReNew Clean Energy Project, which will develop 709 megawatts (MW) of solar and wind projects across the states of Andhra Pradesh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, and Telangana. Earlier this year, the ADB announced approval of a $390 million (~Rs.25.2 billion) financing package for the ReNew Power company overseeing the development of the ReNew Clean Energy Projects, which will go towards funding to develop 398 MW of solar PV projects across Jharkhand and Telangana, and another 311 MW of wind projects in the states of Andhra Pradesh, Gujarat, Karnataka, and Madhya Pradesh.

“Today’s fundraising represents ADB’s maiden Indian Rupee green bond and shows the institution’s long term commitment to financial market development in India,” explained Pierre Van Peteghem, ADB Treasurer. “In today’s markets, green bonds are an increasingly important source of financing for climate change projects and given ADB’s strong engagement in the capital markets of developing Asia, it is a natural next step for ADB to issue green bonds in local currency.”

India is currently the largest borrower of the Asian Development Bank and its fourth largest shareholder. In 2016 alone, the ADB approved $2.26 billion (~Rs.146 billion) in sovereign loans and another $795 million (~Rs.51.3 billion) in private sector projects in India. In February, state-owned electric utilities company Power Grid Corporation of India Limited (PGCIL) secured a loan of $500 million (~Rs.32.3 billion) from the ADB for the development of its Green Energy Corridor project, which will see the development of “the Raigarh-Pugalur 6,000 MW High Voltage Direct Current (HVDC) system and Pugalur-Trichur 2,000 MW VSC based HVDC system associated with HVDC bipole link between the western and southern regions.” The ADB also approved a $175 million (~Rs.11.3 billion) loan to PGCIL in March for the expansion of its solar power transmission network.