Hero Future Energies issues Rs 300 crore certified climate bond

In January 2016, Sebi approved norms for issuance and listing of green bonds

Hero Future Energies, the green energy arm of the Hero Group, 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 Rs 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, issued this certification under a 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.

"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," said Rahul Munjal, managing director, Hero Future Energies

The proceeds from the fund raised will be invested in achieving setting up 2.5 Gw of renewable capacity in the next few years.

In January 2016, Sebi also approved norms for issuance and listing of green bonds.

"Such certifications bring transparency and will help meet the  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," said Sunil Jain, CEO, Hero Future Energies.

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.

According to global reports, the total green bonds issued globally is in the tune of $42.4 billion in 2015 and is expected to cross $60 billion in 2016.