The FINANCIAL — London Stock Exchange welcomes on November 29 the listing of Indian Power Finance Corporation’s (PFC) first international bond in almost two decades. The ten-year dated green bond raised $400 million, paying a 3.75 per cent semi-annual coupon and listed on London Stock Exchange’s new International Securities Market.
PFC will use the proceeds of the bond to invest in renewable energy and energy efficiency projects across India. Eligible projects are identified in PFC’s Green Bond Framework, which was drafted in accordance with the Green Bond Principles, a global set of guidelines framing the issuance of green bonds. The bond is Climate Bonds Initiative certified.
This is the seventh green bond issued on London Stock Exchange in November 2017, and the fifth green bond by an Indian issuer in London, cementing London Stock Exchange’s position as a leading global venue for international debt and sustainable fundraising. Green bonds in London have raised over $3.2 billion in November 2017 alone, according to London Stock Exchange.
Today, Tideway, the company established to construct the Thames Tideway Tunnel in London also listed its first green bond raising £250 million;
Orsted, the Danish energy producer, listed its first green senior bond on 24 November, raising €750 million;
Fingrid, the Finnish electricity grid operator, listed its first green bond on 23 November, raising €100 million;
Westpac, the Australian bank, listed its first ever international green bond on 22 November, raising €500 million;
Toyota Motor Credit, the finance and insurance provider, listed a green bond on 21 November, raising €600 million and
Barclays Plc became the first UK bank to list a green bond on 6 November, raising €500 million.
To date in 2017, there has been 50% growth in the number of green bonds listed on London Stock Exchange, compared with 2016 and a 52% increase in money raised. In 2017 year-to-date 21 green bonds have listed in London, raising $8.7 billion, compared to 14 green bonds which raised $5.7 billion in 2016. In total, there are 59 green bonds listed in London that have raised over $19.5 billion in aggregate terms across seven currencies.
Nikhil Rathi, CEO, London Stock Exchange Plc:
“London Stock Exchange congratulates Indian Power Finance Corporation on its return to the international capital markets and its successful green bond issuance in London today. PFC is unlocking and promoting green finance across India, enabling the country to achieve its ambitious climate change targets set out under the COP21 agreement.
“We were honoured to welcome His Excellency Minister Piyush Goyal in May this year to launch the International Securities Market. And today we are delighted to welcome Rajeev Sharma, Chairman of PFC to launch the next chapter of India’s international green finance ambitions.
“London Stock Exchange is a recognised world leader in green, sustainable and debt financing, highlighted by this year’s exceptional green fixed income activity. London supports issuers from Abu Dhabi to China, Finland to India in accessing international investment capital. There is an undeniable shift in momentum in green and sustainable financing across the world and we believe London Stock Exchange is uniquely placed with its extensive product offering and expertise to support issuers and inventors in this green funding revolution.”
Rajeev Sharma, Chairman, PFC:
“The PFC team is delighted to be welcomed to the London Stock Exchange today in celebration of its Green bond listing. The funds raised will help promote renewable energy projects across the country and aid in achieving the Government’s target of 175GW of installed renewable energy capacity by 2022. The bond issuance allows PFC to access a new offshore investor base and also diversify its funding sources.”
Recent London Stock Exchange Group (LSEG) green finance initiatives and milestones:
LSEG is home to a number of global first green bond issuances from Bank of China and Agricultural Bank of China, India’s Axis Bank, Development Bank of Japan and the IFC, a member of the World Bank Group
In 2016, 14 new green bonds in 5 different currencies raised over $5 billion; in total 59 green bonds are listed on London Stock Exchange that have raised over $19.5 billion
On 7 November 2016, FTSE Russell, the global index provider, announced the creation of a new index, the FTSE All-World Ex CW Climate Balanced Factor Index, the first to combine a smart beta factor approach alongside climate change considerations
The index has been chosen by Legal & General Investment Management for its new Future World Fund, which HSBC Bank UK Pension Scheme has selected for its equity default option, worth £4 billion, in its DC scheme
In 2015 London Stock Exchange launched its dedicated green bond segments creating strict admission criteria aligned with ICMA’s Green Bonds Principles
There are 37 ‘green companies’ which have raised over $7 billion combined in London including 13 renewable investment funds with a combined market cap of over $5 billion
LSEG has been supporting investors and issuers in the transition to a low-carbon and sustainable economy for over a decade, developing innovative products and services in close collaboration with the market. Its comprehensive sustainable finance offering is focused on green financing for issuers (both debt and equity), indexing and analytics. London’s markets are home to a diversified portfolio of green bonds, ETFs, renewable investment funds and corporates whose business models encompass alternative energy.
FTSE Russell, the global index leader, has long been a pioneer in the development of benchmarking tools enabling investors to integrate ESG factors in their portfolios and to track the increasing shift towards a green economy.
LSEG joined the UN’s Sustainable Stock Exchanges initiative as a Partner Exchange in 2014 and has also signed The Paris Pledge for Action.