IFC may back Yes Bank with $100M for Green Bond, lending line for women-owned SMEs

International Finance Corporation (IFC), the private sector investment arm of the World Bank, may invest up to $100 million to back India’s fourth-largest private sector lender Yes Bank Ltd to lend renewable energy projects and women-owned small and medium sized enterprises, it said during the weekend.

IFC plans to invest $50 million each in a Green Bond to be issued by Yes Bank for climate change related projects mainly in the renewable energy sector and for lending to women-owned SMEs.

This is expected to be the first emerging market Green Bond investment by IFC.

Founded in 2004, Yes Bank is the fourth-largest private sector bank in India after ICICI Bank, HDFC Bank and Axis Bank. As a banking and financial services firm it is also behind Kotak Mahindra Bank.

It has a network of over 600 branches pan India as of December 2014.

The bank was started by Rana Kapoor and his late partner Ashok Kapur along with Rabobank International. Over a period of time the bank has raised several rounds of equity.

Recently, it raised $200 million from regional development financial institution Asian Development Bank (ADB) to lend Indian rupee equivalent amount to finance working capital and investment loans targeted towards small farm households and rural women in Self Help Groups (SHGs).

As on December 31, 2014, the sponsor group held 22.08 per cent stake in the bank. It counts several domestic and foreign institutional investors such as LIC, Morgan Stanley Asia (Singapore), Goldman Sachs (Singapore), DB International (Asia), Franklin Templeton Investment Fund, Swiss Finance Corporation (Mauritius), Bajaj Allianz Life Insurance, Credit Suisse (Singapore), Fidelity Investment Trust among others as shareholders.

The lending business of the bank involves full spectrum of project finance, large corporates and SME finance as several short term products.

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