The company secured funding of INR 300 crores through issuance of rated and secured non-convertible debentures.
The first Indian company to issue climate bond certified by the Climate Bonds Initiative standards board.
Rising trend observed among investors to prefer instruments that promote low carbon investments and also increased focus on integrating Environment, Social and Governance (ESG) factors into their investment processes
Hero Future Energies Pvt. Ltd. (HFE), renewable energy venture of the Hero Group recently announced issuance of India’s first certified climate bond for expansion of its wind portfolio, through its wind holding entity. The entity has secured a funding of INR 300 crore through issuance of rated and secured non-convertible debentures. The Climate Bonds Initiative, which is an international, investor-focused not-for-profit organisation, issues this certification under robust framework for monitoring, reporting and assurance of conformance with the relevant Climate Bonds Initiative standards. The certificate for conformance with Climate Bonds standard has been issued following an independent third party assurance.
Mr. Rahul Munjal, Managing Director, Hero Future Energies said, “Achieving GOI’s goal of 175 GW of renewables by 2022 requires a multipronged approach, including innovative financing, newer structures and attracting global investors. As the certified green bond market scales up in India, it is likely to open up new avenues in renewable energy financing. This kind of certification is an assurance on green “use of proceeds” and will thus attract global institutional investors to fund the growing requirements of this sector in the country.”
Mr. Sunil Jain, CEO, Hero Future Energies informed, “The proceeds from the fund raised will be invested in realizing our goal of 2.5 GW over the next few years. In January 2016, SEBI has also approved norms for issuance and listing of green bonds, such certifications bring transparency and will help meet the huge financing requirements worth $2.5 trillion for climate change actions in India by 2030. In my opinion, such competitively priced instruments are the way forward in reducing cost of financing and thereby cost of energy in India.”
Climate bonds are green bonds which require mandatory independent third party verification to provide additional assurance to investors about the climate benefit of their investments. The Climate Bonds Initiative standards sets out clear criteria to verify certain green credentials of a bond. The standard is backed by the Climate Bonds standards board comprising of pre-eminent & independent investor entities, which collectively represents $34 trillion in assets under management.
Mr. Sean Kidney, CEO, Climate Bonds Initiative commented, “Hero Future Energies is to be congratulated on their leadership in issuing a certified green bond with a clean energy foundation. This is a solid example of private sector innovation in climate finance.”
“Taking the step to seek and gain certification sends a positive signal to the market. This initiative by HFE demonstrates to investors and other stakeholders the importance of transparency and disclosure as a part of best practice investment governance in green bond issuance.
According to global reports, the total green bonds issued globally is in the tune of USD 42.4 billion in 2015 and is expected to cross USD 60 billion in 2016.