At a time when cutting emissions and going green is the need of the hour for governments as well as corporations, investment in sustainabiliy in India is expected to surge to $125 billion in four years. This means that a lot of firms will be raising money via loans to meet sustainability targets, while simultaneously ensuring expansion and profits. To make the most of this, the Export Import Bank of India (Exim Bank) has sold sustainability bonds worth $1 billion, as part of its Environmental Social Governance (ESG) Framework.
Where will the proceeds go?
The money raised through these debt instruments, will finance projects under the lender’s own ESG Framework, which focuses on renewable energy, green transportation, and basic infrastructure, as well as social development via affordable housing and sustainable water management.
What do sustainability bonds mean?
Sustainability bonds are debt instruments, through which banks raise money from investors, in order to release loans for renewable energy, clean mobility and other eco-friendly initiatives. Firms are looking for higher investment in these areas, and the bonds which can boost them are being sold with a maturity period of 10 years by Exim Bank. This also makes Exim the first Indian lender to open the markets for dollar and sustainability bond issuances in 2023.