Pakistan launches first green Eurobond called Indus bonds worth $500 million

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Pakistan launches first green Eurobond called Indus bonds worth $500 million

The Water and Power Development Authority (WAPDA) launched its first green Eurobond called the ‘Indus bond’.

The Indus bond is the first green Eurobond in the international capital market by Pakistan. It was listed on the London Stock Exchange earlier this week on Monday.

The bond has a tenure of 10 years and brought the WAPDA $500 million at a price of about 7.5 percent interest rate. It will be formally launched by Prime Minister Imran Khan on 31 May.

The launch of the Indus bond brought six times more subscriptions, of $3 billion, from a number of international investors, including Goldman Sachs, Blackrock, Bluebay, Fidelity, Ashmore, Amundi, and UBS. ------------------------------

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The WAPDA needs nearly $2.2 billion over five years to fund the Diamer-Bhasha and Mohmand dams projects. The funding requirement for the first two years is $1.1 billion, after which the authority may issue more bonds. According to an official statement, the Indus bond will initially be issued for only $500 million but the number of bonds will be gradually increased depending on the financial needs of the projects.

A report compiled by the WAPDA for the bonds states that the ten-year dollar bond has been launched at a competitive price of 7.5 percent. “[This] is unprecedented, given Pakistan’s sovereign bond maturing in 2031 has a coupon of 7.375 percent,” said the report.