Vector Green Energy, a renewable energy-focused independent power producer (IPP) funded by Global Infrastructure Partners (GIP), will issue the first AAA-rated green bond in the local market.

The subsidiaries intend to raise $169 million and have received Climate Bond Standard certification for their bonds. The issue earned the highest rating by CRISIL and India Ratings. The term of the bond will be three years. ICICI Bank and Axis Bank are the underwriters of the contract.

Most foreign funds are focused on environmental, social and corporate governance (ESG) lending, and organizations engage themselves in sustainable projects. This has happened in part because India does not have proper green standards. If a bond or fund is certified ‘green’, it reduces the price by about half a percentage point.

The most comprehensive green loan to date came from Adani Green, which raised $1.3 billion in March. The Adani Group is looking to raise $12 billion in green funds over the next four-five years, with most of the $2-3 billion being allocated annually from overseas markets.

News Source: ConstructionWorld