India now seventh in labelled green bonds issuance, Indian issues top in external certification and reviews
The Climate Bonds Initiative has released the State of the Market 2016 India edition, outlining the key features of India’s growing green bond market. The report finds India now ranks seventh internationally for labelled green bond issuance.
Twin Mumbai and Delhi events are being held to launch the report, timed in conjunction with this week’s inaugural meeting of the newly formed India Green Bonds Market Development Council jointly convened with FICCI.
Other key findings of the State of the Market 2016 India update:
· Renewable energy is the largest segment of labelled green bond issuance at 62%, followed by low carbon transport 17.5%, energy efficiency and low carbon buildings at 14% and, adaption, waste management and water management the remainder at 2.1%, 2.2% and 2.2% respectively.
· NTPC was the single largest issuer with their August INR 20bn (USD 299bn) Climate Bonds Certified Masala Bond, funding clean energy and listed on both the London Stock Exchange and Singapore Stock Exchange.
· Renew Power and PNB Housing Finance were the next largest with INR 5BN (USD 75.2m & 75.5m respectively)
· Indian issuers have been leaders in best practice with five out of seven bonds issued in 2016 receiving a review or certification by an external body. This is the highest international ratio for 2016.
· The report found an additional universe of USD 15.7bn of unlabelled, climate-aligned bonds outstanding. 75% where low carbon transport (solely rail) with the largest issuer being Indian Railway Finance, followed by hydro in the renewable energy sector.
· This level of green investment could be converted to labelled issuances in the future, building market depth and liquidity.
Sean Kidney, CEO Climate Bonds Initiative said:
“India’s regulators have shown leadership by providing new guidance to the market. Indian issuers are active in seeking certification and verification of green bond issuance. Indian green bonds are being listed on international exchanges. Together, these steps will build international investor confidence as new waves of green bonds come to market.”
“Meeting India’s ambitious national development, green infrastructure, and climate mitigation goals requires significant international capital. This report shows good foundations have been established to develop a robust green finance system to help reach these vital goals.”