Indian Railway Finance Corporation Limited (IRFC) issued their first Climate Bonds Certified Bond in early December, 2017. The bond raised USD500 million from investors in Asia, Europe, the Middle East and offshore US. The proceeds of the bond will be used to finance eligible Green Projects under Dedicated Freight Railway Lines and Public Passenger Transport.
IRFC believes railways have a massive role to play in the fight against climate change. For this purpose, IRFC aims to increase the share of railways in the overall land-based freight transport from the current 36% in 2016/17 to 45% by 2030. The company considers the issuance of Green Bonds as an ideal tool to facilitate the transition towards a more sutainable transport infrastructure.
Introduction
Indian Railway Finance
Corporation Ltd. (IRFC) is the dedicated financing arm of the Indian Railway under
the Ministry of Railways (MoR), Government of India and mobilizes funds on behalf on Indian Railways
from domestic as well as overseas capital markets. The funds are utilize
d to support the procurement of
new rolling stock assets, which are locomotives, passenger coaches and wagons and also building up
infrastructure, constituting a significant part of Indian Railways annual capital expenditure
1
.
The Company has been able to
diversify its borrowing portfolio each year through the issue of both taxable
and tax
-
free bonds, term loan from banks / financial institutions besides off shore borrowings, at competitive
market rate.
The Indian Railways have a huge role to play in comb
ating climate change wherein it aims to enhance the
share of the railways in the overall land based freight transport from the present 36% in the FY 2016
-
17 to
45% by the year 2030.
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| DATE OF ISSUE | TYPE OF INSTRUMENT | SIZE | COUNTRY OF ISSUE | CLIMATE BONDS SECTOR CRITERIA | VERIFIER'S REPORT | ANNUAL REPORT | FURTHER INFORMATION |
| December 2017 | Use of proceeds bond | USD 500m | India | Low Carbon Transport |
Annual report published on IRFC Website |