Indian Railway Finance Corporation Raises $500 Million Through Green Notes Issuance

The green notes have a tenor of ten years and a coupon rate of 3.57%


Indian Railway Finance Corporation (IRFC), the financial arm of Indian Railways, has issued $500 million of denominated, senior and unsecured green notes under its $7 billion global medium-term note program.

The green notes will have a tenor of ten years and a coupon rate of 3.57%. The notes are listed at India International Exchange (IFSC) Limited and NSE IFSC Limited and rated Baa3 by Moody’s Investor Services.

The company will utilize the proceeds for funding eligible green assets through a finance leasing model. Alternatively, it will be used for refinancing the current debt for eligible green assets under its ‘Green Financing Framework from Green Debt,’ in line with the applicable laws, including external commercial borrowing guidelines of India.

In March 2021, Union Minister of Railways Piyush Goyal said that the entire Indian rail network would be fully electrified by 2023 and run on renewable energy by 2030. Addressing the Maritime India Summit 2021, he said that Indian Railways had moved 1.1 billion metric tons of freight traffic as of February 28, 2021.

Earlier, the Ministry of Railways announced that the Indian Railways plans to develop 20 GW of solar projects in its vacant lands to help meet projected consumption requirements of over 33 billion units (BU) by 2030.

According to a report published by Climate Trends and Riding Sunbeams, one in four trains of the Indian Railways could be powered by solar power. The report stated that solar projects installed along electrified railway tracks could replace roughly 4 GW of coal-fired electricity and save 20% of Indian Railways’ annual power bills in the first year and 40% thereafter.

In 2019, IRFC signed an agreement with the Asian Development Bank to electrify railway tracks. ADB said it would provide $750 million in long-term financing to help India’s railway sector transition to electric power and away from dependence on fossil fuels.

Mercom had earlier reported that IRFC raised $500 million (~₹32.07 billion) by issuing its first green bond on the London Stock Exchange’s new International Securities Market. The bond was oversubscribed by more than three times, indicating strong support from global investors.


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