KPI Green Energy Limited has successfully listed India's first externally credit-enhanced green bond on the National Stock Exchange, raising INR 670 crore to fund its renewable energy expansion. The milestone issuance marks a significant development in India's green finance sector, introducing a new financing structure for renewable energy projects.

Bond Structure and Credit Enhancement

The five-year bond carries a coupon rate of 8.50% with quarterly amortization. The bond is backed by a 65% partial guarantee from GuarantCo, which is part of the Private Infrastructure Development Group. This credit enhancement mechanism has enabled the bond to secure an AA+(CE) rating from both CRISIL and ICRA rating agencies. The credit enhancement structure has widened access to long-term investors, including mutual funds, insurance firms, and infrastructure funds.

This represents the first time such an externally credit-enhanced green bond structure has been implemented in India's capital markets.

Renewable Energy Expansion Plans

Proceeds from the bond issuance will be deployed to expand KPI's portfolio of solar, wind, and hybrid renewable energy projects across India. The company's expansion is expected to deliver clean electricity to over 210,000 people and businesses annually while avoiding more than 344,000 tonnes of carbon emissions. KPI Green Energy has already developed over 1 GW of renewable capacity and maintains a pipeline exceeding 3 GW. The company is advancing towards its target of 10 GW of renewable energy capacity by 2030.

Leadership Statement and Market Impact

Chairman and MD Dr. Faruk G. Patel stated that the bond demonstrates the company's commitment to sustainability while setting new benchmarks for ESG investments in India. The successful listing represents a new financing pathway for renewable energy companies in the Indian market. The bond's listing on the National Stock Exchange provides a template for other renewable energy companies seeking to access capital markets through credit-enhanced structures.

The involvement of GuarantCo's guarantee mechanism offers a risk mitigation tool that could attract a broader base of institutional investors to green bond investments in India's renewable energy sector.

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