In the Spotlight: Domestic certified transactions take off in India, creating deeper awareness and understanding, potentially developing onshore activity in a largely offshore market

In the Spotlight: Domestic certified transactions take off in India, creating deeper awareness and understanding, potentially developing onshore activity in a largely offshore market.

By Sandeep Bhattacharya


The Indian green social and sustainability bond market has seen a cumulative issuance of over USD 19.5 Billion and 2021 has been a bumper year for the GSS market, with more than USD 8 Billion in issuances.

Until now, the market has been largely an offshore one, driven by demand from offshore investors who continuously show strong preference for GSS issuances.

However, that trend is set to change, as some of the recent certified domestic issuances indicate. In addition, we are also seeing increased queries about potential GSS issuances which are domestically oriented.


Notable recent certified issuances to which this shift could possibly be attributed include:

  • Vector Green, a Mumbai-headquartered renewable energy focussed power producer, raising Rs 1,237crore (USD 160.5 Million odd) in domestic green bonds in mid-2021. At the time the company stated that the domestic bonds market is more attractive as there is no foreign exchange risk and due to the cost of raising funds which is also much cheaper.
  • In March 2022 Avaada Energy raised Rs.1440 Crores (USD 192 Million odd), making it India’s largest issue of its kind by any renewable energy developer.


In both these issuances, Climate Bonds Initiative was involved since initial discussions in 2018.


  • In March 2022, Manyata Promoters Private Limited, a Special Purpose Vehicle of Embassy Office Parks REIT ('Embassy REIT'), got one of its loans certifications for ₹730 crores( USD 97.3 Million) certified as green. The loan was obtained from Axis Bank. This was India's first listed REIT and the largest office REIT in Asia by area. It also marked the first time a REIT in India received a green loan Certification from Climate Bonds Initiative.


Together, the impact of these three transactions has been notable on the domestic transaction pipeline, as people can relate to a domestic transaction.

A domestic onshore issuance has more depth in creating long term awareness and education, as the transaction process of such a bond sparks a lot of dialogue within the investment community. For example, "practical clarifications" about issues and details which historically looked somewhat "conceptual" are enabled; hopefully creating greater investor appetite and hence forth also a virtuous cycle.


Climate Bonds Certification landscape

In 2021, Cumulative issuance under the Climate Bonds Standard passed USD200bn in the latter part of the year, establishing a new milestone for international best practice in green investment. Certified green bonds, loans, sukuk (and other debt instruments such as green deposits, leases, commercial paper and repos) have now been issued by over 220 issuers from 40 nations, helping to establish green market investment standards and harmonised definitions in multiple jurisdictions in both developed and emerging economies.

This latest milestone demonstrates that market appetite for credible, robust science-based green issuance remains strong.


Learn more about the Climate Bonds Certification process here.

The Last Word

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