Asian Development Bank Raises INR 12.5 Billion in Landmark Green Bond Issue
The bond, denominated in Indian rupees but settled in United States dollars, introduces a unique feature where returns to investors are tied to the performance of the Indian currency, commonly known as masala bonds in the Indian financial community.
February 01, 2024. By Abha Rustagi
The bond, denominated in Indian rupees but settled in United States dollars, introduces a unique feature where returns to investors are tied to the performance of the Indian currency, commonly known as masala bonds in the Indian financial community. This financial innovation provides a fresh avenue for international investors to participate in green projects while managing currency risk.
Proceeds from this record-breaking green bond issuance will be directed towards financing ADB’s private sector renewable energy and green finance projects. These initiatives align with ADB’s strategic priorities, focusing on addressing climate change, building climate and disaster resilience, and enhancing environmental sustainability.
Pierre Van Peteghem, ADB Treasurer, emphasized the significance of sustainability in international capital markets, stating, “The ability to finance climate change projects with local currency green bonds represents the apex of our ambition while contributing to capital market development.”
Listed on the Luxembourg Stock Exchange, the bond offering was arranged by Standard Chartered Bank and garnered substantial interest from a group of UK and US investors. The benchmark size for a local currency bond with a green theme, backed by a multilateral development bank, attracted investors seeking both environmental impact and financial returns.
This successful green bond issuance marks ADB's return to the Indian rupee bond market after a 3-year hiatus, underlining its commitment to fostering sustainable development in the region. ADB, a regular issuer of green bonds since 2017, has been a key player in the Indian rupee bond market, raising more than USD 1 billion equivalent through multiple masala bond issues.
As ADB continues its efforts towards achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, the latest green bond issuance reinforces its dedication to eradicating extreme poverty. Established in 1966 and owned by 68 members, with 49 from the region, ADB stands at the forefront of promoting environmentally conscious financial instruments for a brighter future.
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