Axis Bank on Monday raised $500 million at the london Stock Exchange after it launched India’s first internationally-listed certified green bond to finance climate change solutions around the world.
One of India’s leading private sector capital markets banks opened trading at the london Stock Exchange (lSE) with the bond, which is certified by the Climate Bonds Standards Board and raised $500 million.
Axis Bank said the proceeds of the bond will be invested in green energy, transportation and infrastructure projects, reinforcing India’s commitment to produce 175,000 MW of renewable power by 2022.
“london Stock Exchange is a world leader in green bond listings, home to international green finance from India and China. In partnership with the UK Government, we remain committed to building london as the premier centre for green bond issuance and green finance and look forward to further collaboration with Axis Bank, as it continues to strengthen its presence in the UK and globally,” said Nikhil Rathi, CEO of london Stock Exchange PlC and Director of International Development, london Stock Exchange Group.
He described Axis Bank as a “long standing and distinguished equity issuer” on london Stock Exchange with the latest issuance building on the “far-reaching announcements made during Prime Minister Narendra Modi’s visit strengthening financial ties between the UK and India” in last November.
This is the first green bond for Axis Bank within its $5 billion Medium Term Note (MTN) programme, which has also listed entirely on lSE.
Shikha Sharma, managing director & CEO of Axis Bank, said: “We, at Axis Bank, have always demonstrated our commitment to fostering a green and sustainable environment through our various initiatives. In addition to putting in place ‘sustainable lending’ practices on the lending side, Axis has also taken measures at its corporate office and branches to promote a green footprint”.
“To further progress on this journey, Axis Bank launched and successfully completed the first certified Green Bond issue, the issue we are pleased to list on the london Stock Exchange today,” she said.
“The encouraging response to this issue is reflective of the keenness of global investors to promote and support a sustainable environment and also acknowledge Axis’s credibility in this space.
The ease of the listing process and breadth of investors seen in this bond issuance demonstrates the role london Stock Exchange can play in supporting India’s financing needs. She added.
To celebrate the listing, Rathi also welcomed Indian-origin Alok Sharma MP, British Prime Minister David Cameron’s Infrastructure Envoy to India, to open trading at lSE”I am absolutely delighted to see Axis Bank come to the city of london to raise finance for green infrastructure investment. This demonstrates the UK’s pivotal role in helping to finance transport and renewable energy projects in India. Make in India, finance in Britain is clearly a winning formula,” Sharma said.
Axis Bank’s green bond follows the listing of the first Rupee-denominated bond on lSE, issued by International Finance Corporation (IFC) in 2014.
The proceeds of the $163 million equivalent Masala bond were invested into Axis Bank’s infrastructure bonds.
lSE claims a strong track record of supporting green issuance on its markets. london welcomed the first green bond ever issued by a Chinese financial institution last year.
Agricultural Bank of China issued Renminbi and dollar green bonds with a total value of $1 billion on london Stock Exchange in October 2015.
This followed the launch in July 2015 of a range of new segments on london Stock Exchange’s fixed income markets, designed to support the new global demand for green bonds.
To date, there are 31 green bonds on london Stock Exchange, including those denominated in Rupees and Renminbi, which have raised over$7 billion.
In 2016 alone, six new green bonds have raised over 2 billion dollars. Green or climate bonds are a relatively new asset class issued in order to raise finance for climate change solutions around the world.