Indian Railways Raises $500 Million Through Green Bond Issue
Indian Railways has taken yet another initiative towards its goal to increase the use of renewable energy in its operations.
The financing arm of Indian Railways has raised $500 million through a green bonds issue which is listed at the International Securities Market of the London Stock Exchange. The bond was offered at an annual yield of 3.835% for a period of 10 years.
The Indian Railways Finance Corporation will use the funds raised from the green bond issue toward the electrification of rail tracks and to reduce its dependence on diesel locomotives, thereby significant cutting down on greenhouse gas emissions.
While details of planned investments and target projects remain unknown, Indian Railways has a very ambitious renewable energy program. A nationwide project to set up rooftop solar power systems at more than 7,000 railway stations is already underway.
Additionally, plans are also afloat to set uputility-scale solar power projects at unused land parcels owned by Indian Railways; NLC India has reportedly been tasked to implement the project. The Indian Railways also proposed a 700-800 megawatt solar power park in the state of Madhya Pradesh on the lines of the Rewa solar power park, and the World Bank fund project which is among the cheapest solar power projects in India.
We had earlier reported that the United Nations Development Programme (UNDP) has identified that renewable energy sources could contribute to as much as 25% of Indian Railway’s energy needs by 2025.
The Council on Energy, Environment and Water (CEEW) has found that Indian Railways could set up 5 gigawatts of solar power capacity, through rooftop and utility-scale projects, to significantly increase its consumption of renewable energy over the next few years. The study by CEEW shows that 3,900 megawatts of utility-scale projects and 1,100 megawatts of rooftop projects can be installed by the Indian Railways with an estimated investment of $3.6 billion. Last year, the Indian Railways joined hands with UNDP to execute plans to set up 5,000 megawatts of solar power capacity.
Apart from the Indian Railways Finance Corporation, the Indian Renewable Energy Development Agency ($109 million), Rural Electrification Corporation ($450 million), and the Power Finance Corporation ($400 million) have successfully raised funds through green bonds issues this year. All these government-owned entities have listed their green bond issues at the London Stock Exchange.