CLP Wind Farms (India) Announces the 1st Corporate Green Bond Issuance in Power Sector

CLP India has announced the issuance of Corporate Green Bondsfor its wind portfolio - CLP Wind Farms. CLP Wind Farmswill raise`600 crores through issue of rated, secured,unlisted, redeemable non-convertible debentures.

CLP is the largest wind power developer in India with committed wind projects of more than 1,000 MW, spread across six states. The proceeds from these bonds will be used for funding the capital expenditure of its projects in the renewable space. CLP Wind Farms is the first mover to issue Corporate Green Bonds in the Indian power sector. This move will help CLP sustainits expansion of the renewable energy portfolio in alignment with the company’s vision to lowercarbon emission footprint.

India Ratings and Research Private Limited has assigned a rating of AA to the bonds.Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations and very low credit risk.The bonds, with a coupon of 9.15%per annumbeing issued in three series of equal amounts,will matureevery April in 2018, 2019 and 2020. Standard Chartered Bank,IDFC Limitedand The Hongkong and Shanghai Banking Corporation Limitedare the lead arrangers for the bond issuance.

Mr. Rajiv Mishra, Managing Director, CLP India, said,“Through the issuance of these bonds we plan to fund the expenditure of new projects in the renewable energy space and thereby support CLP's growth plans for India. There isenormous potential in the Indian renewable power market and we see ourselves making a vital contribution towards the government’sobjectiveof increasing capacities inclean energy.”

Mr. Samir Ashta, Director- Finance and Chief Financial Officer, CLP India, said, “We were the first to introduce asset specific bonds in the Indian power sector for our Jhajjar power plant earlier this year. The issuance of the Corporate Green Bonds by CLP Wind Farms has set a benchmark for re-financing of power projects, post commissioning.At CLP India, we always think of innovative financial structures to improve the overall project viability.The structure of these bonds achieves the twin objectives of accessing long term funds at competitive rates for us and an attractive long term investment opportunity for the investors.It is also beneficial from the company’s perspective to keep its interest cost in check as the interest outgo towards repayment remains fixed and is not variable as in the case ofbank borrowing.”

Mr. Chetan Joshi, Head - Debt Capital Markets India, HSBC,said,"This transaction by CLP India is groundbreaking as it represents the first  Green Bond issuance by a corporate out of India, South Asia as well as South East Asia.  Sustainable finance, including green bonds, is one of the most important and fast-growing segments of the global markets, and we expect CLP's issuance it to pave the way for standardization of this new financing instrument in the Indian capital markets. The transaction also represents a successful return to the bond market for the CLP group in India, through a very well executed offering which allows the CLP India renewables vertical to diversify its financing mix to the bond market via a fixed rate funding instrument."

Mr. Kaustubh Kulkarni, Managing Director & Head Debt Capital Markets, South Asia, Standard Chartered Bank,said,"The Green Bond debut issue from CLP Wind Farms follows the highly successful partially credit enhanced bond from the CLP Group earlier this year and highlights investor appetite for strong credits and eminent management. The unique corporate structure adopted in wind business has helped the Issuer raise financing for new wind projects through the bond route. The deal adds to the list of many firsts for CLP Group in India in the form of first corporate Green Bond issuance from South Asia and South East Asia. The issuance will go a long way in promoting green issuances and contributing to sustainability initiatives of the Indian corporate sector" said Kaustubh Kulkarni, Head - Debt Capital Markets, South Asia, Standard Chartered Bank.”

Mr. Jayen Shah , Head - Debt Capital Markets Financial Markets Group, IDFC,said, “Wind-Energy Generation is the need of the hour for energy-hungry country like India. Several renewable energy generating companies have reached a steady-cash flow generating stage. These companies have grown in size, stature and ratings for accessing debt capital markets through bond issuances. Further, by diversifying its funding base from traditional term lending banks and financial institutions to mutual funds, insurance companies and other long-term debt providers, these companies are armed financial ammunition and leverage to continue with its aggressive growth. We, at IDFC, continuously work to develop bond market products meeting objectives of issuers and investors.”