Green financing has become a novel way for developing countries to access a larger investor market across the globe. The demand for green projects and investments is piling up as traditional avenues of growth have tapered off. Accordingly, heavy weights like Adani, SBI, ReNew Power and JSW Energy have taken up green financing as a way to secure investments for future growth and projects.
Green bonds and sustainability-linked bonds (SLBs) have become the most popular instruments for green financing. Notably, companies like Adani and SBI have issued green bonds and SLBs in the recent past. When it comes to issuing such bonds, India INX’s Global Securities Market (GSM) is a popular platform through which companies list such instruments. Since its launch in 2018, India INX’s GSM platform has become the largest listing platform for bonds and has since then introduced its own GSM-Green platform to report trades in Green Debt Products.
Recently, Adani Electricity Mumbai Limited (AEML) listed its $2 billion Global Medium Term Note (GMTN) programme on the India INX GSM platform. This was a historic milestone which marked the first time an energy player had issued a GMTN programme in India. Additionally, another $300 million in SLBs was raised by the company as part of the $2 billion programme. The SLBs, in particular, attracted hefty attention from global investors leading to the issue being oversubscribed 9.2 times.
The addition of AEML’s listing takes the total Medium Term Note (MTN) listings on India INX’s GSM platform to $52.57 billion. Till date, MTN programmes worth $50.6 billion have been listed with more than $27.4 billion in bonds issued. Included in the list of issuers are major financial institutions, Public Sector Undertakings (PSUs) and other private players like Adani, SBI, REC, NTPC and JSW Energy.
ReNew Power is another player that has bonds listed on India INX’s GSM. The 7.25 year $585 million green dollar bonds issued by the company earlier this year is listed on the GSM platform. The simplified listing process and competitive pricing offered by the GSM platform makes it an attractive proposition for issuers.
Such platforms which allow for competitive pricing and listing of green bonds as well as SLBs on the international market will do wonders for India’s renewable energy sector. As the economy slowly gains traction following the COVID pandemic, green investments will prove to be a game changer as their profitability becomes apparent. It therefore makes sense for players like JSW Energy, Adani and SBI to shift their focus towards green financing in the foreseeable future.