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Tuesday, March 3, 2015

IFC to invest $50 m in YES Bank’s Green Bonds

International Finance Corporation (IFC), Washington, plans to invest up to $50 million in Green Bonds to be issued by YES Bank.

In addition, IFC will also give a $50-million long-term financing line to the private sector bank for on lending to women-owned small and medium-sized enterprises.  In a project report, IFC said the financing will flow to target customers of YES Bank in different parts of India.
New asset class

IFC’s investment is expected to generate support and confidence in the Green Bond market which is a new asset class in India and help create a new and viable source of long-term financing for climate change projects in the domestic markets.

“The development of the Green Bond Market will provide an impetus to the development of the overall local currency bond market which is a high developmental priority for IFC and for the Government of India.

“IFC’s investment in an Emerging Market Green Bond will encourage issuers in other markets to issue Green Bonds and support greater resources for Climate Change finance and development of domestic capital markets,” IFC said.
Earlier issue

Last week, YES Bank raised ₹1,000 crore by issuing green infrastructure bonds of 10-year maturity. The proceeds of the issue will be used for lending towards renewable energy sector.

Women-owned businesses, according to IFC, are less likely to be banked because they tend to be smaller and less formal.

It observed that the socio-cultural environment, where men are still regarded as the heads of the household owning land and property of the family, makes it difficult for women to present assets as collateral to access finance.

Source : Thehindubusinessline


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