PFC Issues $400 Million of Green Bonds on LSE’s International Securities Market

The Power Finance Corporation (PFC), an undertaking of the government of India, made its first international bond issuance in more than two decades last week when it issued $400 million (~₹25.72 billion) of green bonds on the London Stock Exchange (LSE)’s new International Securities Market (ISM).

“LSE congratulates PFC on its return to the international capital markets and its successful green bond issuance in London today. PFC is unlocking and promoting green finance across India, enabling the country to achieve its ambitious climate change targets set out under the COP21 agreement,” said Nikhil Rathi, chief executive officer of LSE.

The 10-year dated green bond was issued on November 29, 2017. It is certified by the Climate Bonds Initiative and has a semi-annual coupon rate of 3.75 percent. PFC will invest the proceeds in renewable energy and energy efficiency projects across India.

“The funds raised will help promote renewable energy projects across the country and aid in achieving the government’s target of 175 GW of installed renewable energy capacity by 2022. The bond issuance allows PFC to access a new offshore investor base and also diversify its funding sources,” said PFC Chairman Rajeev Sharma.

Eligible projects have already been identified in PFC’s Green Bond Framework, which was drafted in accordance with the Green Bond Principles, a global set of guidelines that frames the issuance of green bonds.

PFC’s bond marked the seventh green bond issued on LSE in November 2017, and it also holds the distinction of being the fifth green bond issued by an Indian issuer in London. LSE says the bond cements its position as a leading global venue for international debt and sustainable fundraising.

The LSE is the typical destination for most Indian government undertakings that are looking to issue green bonds on the international market. In July 2017, the Rural Electrification Corporation of India raised $450 million (~₹28.93 billion) through the sale of green bonds on the LSE. The National Thermal Power Corporation (NTPC) has also listed its green bonds on the LSE multiple times.

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