Hero Future Energies gives Indian RE market its first certified climate bond

Secures R300 crores by Issuing Climate Bonds

Hero Future Energies gives Indian RE market its first certified climate bond

Hero Future Energies Pvt. Ltd. (HFE)–the renewable energy venture of the Hero Group today announced issuance of India’s first certified climate bond for expansion of its wind portfolio, through its wind holding entity.

The entity has secured a funding of Rs 300 crore through issuance of rated and secured non-convertible debentures.

The Climate Bonds Initiative, which is an international, investor-focused not-for-profit organisation, issues this certification under robust framework for monitoring, reporting and assurance of conformance with the relevant Climate Bonds Initiative standards. The certificate for conformance with Climate Bonds standard has been issued following an independent third party assurance.

“Achieving GOI’s goal of 175 GW of renewables by 2022 requires a multipronged approach, including innovative financing, newer structures and attracting global investors. As the certified green bond market scales up in India, it is likely to open up new avenues in renewable energy financing. This kind of certification is an assurance on green “use of proceeds” and will thus attract global institutional investors to fund the growing requirements of this sector in the country,” said Rahul Munjal, Managing Director, Hero Future Energies.

Climate bonds are green bonds which require mandatory independent third party verification to provide additional assurance to investors about the climate benefit of their investments. The Climate Bonds Initiative standards sets out clear criteria to verify certain green credentials of a bond. The standard is backed by the Climate Bonds standards board comprising of pre-eminent & independent investor entities, which collectively represents $34 trillion in assets under management.

According to Sunil Jain, CEO, Hero Future Energies, the proceeds from the fund raised will be invested in realizing our goal of 2.5 GW over the next few years. In January 2016, SEBI has also approved norms for issuance and listing of green bonds, such certifications bring transparency and will help meet the huge financing requirements worth $2.5 trillion for climate change actions in India by 2030. In my opinion, such competitively priced instruments are the way forward in reducing cost of financing and thereby cost of energy in India.

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According to global reports, the total green bonds issued globally is in the tune of USD 42.4 billion in 2015 and is expected to cross USD 60 billion in 2016.

The Climate Bonds Initiative is an international, investor-focused not-for-profit. It’s the only organisation in the world focusing on mobilizing the $100 trillion bond market for climate change solutions. They promote investment in projects and assets necessary for a rapid transition to a low-carbon and climate resilient economy.

The strategy is to develop a large and liquid green and climate bonds market that will help drive down the cost of capital for climate projects in developed and emerging markets; to grow aggregation mechanisms for fragmented sectors; and to support governments seeking to tap debt capital markets.

“Hero Future Energies is to be congratulated on their leadership in issuing a certified green bond with a clean energy foundation. This is a solid example of private sector innovation in climate finance,” commented Sean Kidney, CEO, Climate Bonds Initiative.

“Taking the step to seek and gain certification sends a positive signal to the market. This initiative by HFE demonstrates to investors and other stakeholders the importance of transparency and disclosure as a part of best practice investment governance in green bond issuance.”

About Hero Future Energies:

Hero Future Energies Pvt. Limited (HFE), one of India’s leading Independent Power Producers (IPP) in renewable energy, came into existence in the year 2012. HFE carries an illustrious legacy of the Hero Group. The company today has presence in nearly 10 states of India will have a cumulative installed capacity of ~600 MW by May end 2016 across wind, solar PV (grid connected) and rooftop solutions.

The company has a track record of installing one of the largest rooftop solar plant in the country (1.5 MWp) and is among the leaders with nearly 15 MW of rooftop solar in India.

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The company is steered by Rahul Munjal- Founder & Managing Director and Sunil Jain who is the CEO, HFE.

Together with its strong execution capabilities and efficient project management skills, the company has developed high quality and diversified wind & solar asset base in such a short time span. HFE has achieved one of the lowest employee per MW in the industry. The company is known for adhering to the highest standards of corporate governance.