Sagarmala Finance Corporation is set to launch India's first blue bond issuance on September 28, aiming to raise 6 billion rupees ($62.62 million) for maritime sector projects. The funds will support port development and coastal road networks, with SBI Capital Markets arranging the issue.
The lender plans to raise the capital through the sale of 10-year bonds, including a greenshoe option of 5 billion rupees. The bonds are rated AA+ by Icra and Care, indicating a high degree of safety regarding timely servicing of financial obligations. Investors are invited to submit coupon and commitment bids on Monday.
Blue bonds are a debt instrument designed to finance sustainable water and marine projects, such as clean water initiatives, recycling, shipping, sustainable fishing, ocean energy, and mapping. Sagarmala's initiative marks a significant step in promoting sustainable development within India's maritime sector.
“The proceeds will be used for maritime sector lending, greenfield port projects, funding coastal road network and more.”
L.V.S. Sudhakar Babu, Managing Director, Sagarmala Finance Corporation
Managing Director L.V.S. Sudhakar Babu stated that the proceeds will be utilized for maritime sector lending, greenfield port projects, and funding coastal road networks, with the funds expected to be deployed within the current financial year.
The company has reached out to large insurance and provident fund players to invest in this issue, indicating a strategic approach to secure substantial backing for its pioneering initiative.
Vadodara Municipal Corporation, an urban local body from Gujarat, is also planning to raise around two billion rupees through the sale of blue bonds, highlighting a growing interest in sustainable finance solutions in India.
Background
The introduction of blue bonds in India aligns with global trends towards sustainable finance, aiming to address environmental challenges while fostering economic growth. This move could pave the way for more such initiatives in the future, as stakeholders increasingly prioritize sustainability.
As Sagarmala Finance Corporation prepares for its maiden blue bond issuance, the financial community will be keenly observing investor response and the impact of this innovative financial instrument on the maritime sector.
