IFC’s green masala bond raises $49m

International Finance Corporation (IFC), the World Bank’s private lending arm, has raised 3.15 billion rupees ($49.2 million) in its first green bond in the offshore rupee markets.

The offering was launched with the partial aim of funding India’s fourth-largest private sector lender Yes Bank’s renewable energy- and energy-efficiency projects.

IFC plans to invest proceeds from the issuance in Yes Bank’s rupee-denominated bond, which offers a coupon rate of 8.95% over a 10-year maturity, according to two sources familiar with the deal.

Yes Bank offered its maiden green bond in February, a 10-year tenor that priced on February 24, carrying a coupon rate of 8.85 per cent. The Indian lender’s investment banking unit was the sole underwriter of this first foray into green bonds.

“Addressing climate change is a priority for IFC in India, and the green masala bond demonstrates the powerful role of capital markets in mobilising international savings to help close the climate finance gap,” Jingdong Hua, vice-president and treasurer of IFC, said in the statement. “Adding the rupee as a new green bond currency also supports our goals to strengthen this important assets class.”

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