In a groundbreaking move towards sustainable finance, the Asian Development Bank (ADB) has successfully raised ₹12.5 billion, approximately $150 million, through its largest local currency green bond issuance to date.
Structured as a 4-year currency-linked bond with a fixed interest rate of 6.72% per annum, the bond is denominated in Indian rupees but settled in United States dollars. This innovative bond, often referred to as masala bonds within India’s financial circles, is indexed to the performance of the Indian currency.
The proceeds from this milestone issuance are dedicated to funding ADB’s private sector renewable energy and green finance projects, in accordance with its strategic priority of addressing climate change, enhancing climate and disaster resilience, and promoting environmental sustainability.
ADB Treasurer, Pierre Van Peteghem, underscored the institution’s commitment to sustainability, stating, “Sustainability is a key driver for international capital markets, and ADB is long established as a regular issuer of green bonds. The ability to finance climate change projects with local currency green bonds represents the apex of our ambition, while contributing to capital market development.”
The bond, listed on the Luxembourg Stock Exchange, was arranged by Standard Chartered Bank and garnered significant interest from UK and US investors. Its benchmark size for a local currency bond with a green theme, backed by a multilateral development bank, attracted investors’ attention.
This issuance marks ADB’s return to the Indian rupee bond market after a 3-year hiatus and signifies its ongoing commitment to fostering sustainable development in Asia and the Pacific. Established in 1966, ADB is owned by 68 members, with 49 from the region.