New Delhi: International Finance Corporation (IFC) on Monday said it is investing about $50 million in a sustainability-linked bond (SLB) issued by Tata Cleantech Capital (TCCL).
This is the first such instrument issued by a private financial institution in India and will support the country’s shift to a clean energy economy, said the official press release.
“Aligning with our sustainability goals, IFC’s innovative financing structure will enable us to be a pioneer issuer of a SLB in India and strengthen our green financing portfolio. Also, the financing will help diversify our borrowings’ profile in the fight against climate change,” said Manish Chourasia, managing director, TCCL, a joint venture between Tata Capital and IFC.
The release said that the firm will work towards scaling up on-lending towards renewable energy projects and diversifying into energy efficiency and e-mobility sectors over the next three years.
IFC estimates that the country will need about $403 billion in renewable finance by 2030 to achieve its renewable targets.
“IFC’s partnership with a long-term equity investee company and leader in climate finance is timely and will help promote resilient infrastructure and financial markets by catalysing the issuance of India’s first sustainability-linked bond by a financial institution,” said Joon Young Park, IFC’s Portfolio Manager, Financial Institutions Group for South Asia.
Park added that the project will deepen and broaden India’s debt capital markets, which is key to achieving sustainable and inclusive growth.
SLBs focus on impact and measurable results, going beyond the end-use focused approach of green, social, and sustainable instruments, and helping organizations improve performance against tailor-made environment, social and governance targets that also contribute to the United Nations Global Goals.