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1st February 2018

First international local currency green bond guarantee in Asia

Replication hopes for innovative synthetic bond to combat climate change

GuarantCo has guaranteed the issue of a ₹2.5bn Indian rupee international green bond, a first in Asia for the PIDG company. TAF also provided funds to cover the legal costs associated with the pioneering issuance. 

Sindicatum, which develops, owns and operates renewable energy projects, will use the money raised to acquire clean power plants, including a number of solar farms in India and the Philippines, and refinance current US$ debts into local currency.

The projects will improve the quality of electricity supply, including reduced blackouts, for around 100,000 people.

GuarantCo’s CEO, Lasitha Perera, said: “GuarantCo is committed to mobilising capital markets to support the growth of infrastructure developers that operate in lower income countries.

“In line with this mission, it is our hope that the innovative synthetic local currency bond structure, developed for Sindicatum, will be replicated by other developers of critical infrastructure in lower income countries to access the international capital markets whilst mitigating currency risk.”

Moody’s rated the bond A1 and Fitch AA-. The security of GuarantCo’s 100% guarantee was responsible for this positive rating, which also made it feasible for institutional investors to invest.

CEO of Sindicatum, Assaad W. Razzouk, said: “We hope that our green bond will increase investors’ limited support to date of the green bond market and help accelerate the mobilisation of sustainable finance for south and south-east Asia, a region at the front lines of suffering from climate change.”