INSUBCONTINENT EXCLUSIVE:
MUMBAI: State Bank of India (SBI) would sell its first series of green bonds to raise about $500-750 million, demonstrating its commitment
to sustainable and climate-friendly projects in a country that must accelerate broader economic growth to haul its marginal population out
of the poverty sinkhole.
The green bond sale, likely in two tranches, could open for subscription within the next few days, three people
aware of the sale told ET
projects that do not emit toxic elements.
Investment bankers for the sale include Credit Agricole, SBI Cap, Citi, Bank of America, and
popular, with sustainability emerging as the key metric in deciding both financing commitments and fates of several development projects
Proceeds from green bonds are set aside for projects that are deemed to be environment friendly
Offerings of green bonds hit a record $155 billion in 2017, according to an analysis by Bloomberg Intelligence.
Bankers are currently in
discussion to obtain commitments from global investors whom they would meet this week, sources said
The issue could be priced within this week.
The bonds may be priced either at fixed rate or at floating rate
If it is fixed at a floating rate, the issuer will offer a spread or mark-up over the US dollar-based LIBOR, said one of the persons cited
above.
Normally, green bonds offer lower rate rates compared to normal dollar-denominated bonds sold by Indian companies.
About nine months
ago, SBI had internally approved a $3-billion mega fund-raising plan through the green bond route
It also obtained the approval from a global adjudicating authority on green bonds, ET reported on September 4 last year.
The bank is now
compliant with global standards as prescribed by the Climate Bonds Initiative, an international investor-focused charity
The non-government, non-profit ensures compliance standards for green bond funds, and is working solely on mobilising the $100-trillion debt
market for climate change solutions.
Globally, green bonds are gaining momentum with many countries selling such debt papers.
Credit
Agricole, one of the bankers to SBI, has supported two such sovereign sales from France and Belgium in the past one and a half years as
Citi and Standard Chartered Bank have also played leading roles globally in this space.
