Bank of Baroda Raises ₹100 Billion Through Green Infrastructure Bonds
“The Green Infrastructure Bond issue marks a significant milestone for Bank of Baroda and a defining moment for India’s domestic ESG bond market,” said Debadatta Chand, a key participant in the bond issuance.
In a landmark move, Bank of Baroda has raised ₹100 billion through its Series I Long-Term Green Infrastructure Bonds, aimed at supporting long-term funding for renewable energy and sustainable infrastructure projects. This issuance has garnered significant interest, receiving total bids of ₹164.15 billion, which is over three times the base issue size of ₹50 billion.
The bonds, which will run for seven years, were issued through the National Stock Exchange’s Electronic Book Platform. Investors can expect an annual interest rate of 7.1% on these bonds, making them an attractive option for those looking to invest in green initiatives.
The proceeds from the green infrastructure bonds will be allocated to eligible green projects that align with Bank of Baroda’s Green Financing Framework. This initiative underscores the bank’s commitment to promoting sustainable development and addressing climate change.
Bank of Baroda has made history by becoming the first Indian bank to issue long-term green infrastructure bonds locally. The bond issue has been assigned ‘AAA’ ratings with a stable outlook by CARE Ratings and ICRA Limited, further enhancing its credibility in the market.
Prior to this bond issuance, Bank of Baroda introduced the bob Green Hydrogen Financing Scheme, which supports green hydrogen production facilities for captive usage. This initiative reflects the bank’s broader strategy to invest in sustainable and innovative energy solutions.
The overwhelming response to the bond issue, with bids worth ₹16,415 crore, indicates a strong market appetite for green financing options. This trend is expected to continue as more investors seek to align their portfolios with environmental, social, and governance (ESG) criteria.
As the market for green bonds continues to evolve, Bank of Baroda’s successful issuance could pave the way for other financial institutions in India to explore similar opportunities. The next expected development will be the deployment of the raised funds into eligible projects, which will be closely monitored by stakeholders.
Details remain unconfirmed regarding the specific projects that will receive funding from these bonds, but the bank’s commitment to green financing is clear.
