Euro Green Bond


    In News 

    • Recently, Power Finance Corporation (PFC) launched its maiden €300 million 7-year Euro Green Bond issuance. 


    • The issuance saw strong participation from institutional investors across Asia and Europe with participation from across 82 accounts and was oversubscribed 2.65 times.
      • The overwhelming response to the issuance reflects international investors’ confidence in PFC. 
      • This issuance also demonstrates a commitment to achieving India’s renewable energy goals. 
    • The pricing of 1.841 per cent achieved is the lowest yield locked in by an Indian issuer in the Euro markets.
    • It is not only the first Euro bond issuance by PFC but also the first-ever Euro-denominated Green bond issuance from India. 
      • Moreover, it is the first Euro issuance by an Indian non-banking finance corporation(NBFC) and the first Euro bond issuance from India since 2017.
    • Relevance 
      • This bond issuance would help PFC in diversifying its currency book as well as the investor base.

    What is a Green bond?

    • A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects. 
    • These bonds are typically asset-linked and backed by the issuing entity’s balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations.?
    • Green bonds may come with tax incentives to enhance their attractiveness to investors.
    • The World Bank is a major issuer of green bonds.

    Source: PIB