36208 - Yes Bank Infra

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Summary of Investment Information

Project Number

36208

Company Name

YES BANK LIMITED

Date SPI Disclosed

Feb 27, 2015

Country

India

Region

South Asia

Projected Board Date

Mar 20, 2015

Environmental Category

FI-1 - Significant

Status

Completed

Last Updated Date

Nov 1, 2025

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Sep 7, 2015
Signed : Jun 29, 2015
Invested : Aug 5, 2015

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The Project comprises an IFC investment in a Green Bond to be issued by Yes Bank, the proceeds of which would be on lent to eligible climate change finance projects mainly in the renewable energy sector. This is expected to be the first Emerging Market Green Bond investment by IFC. The project also includes a long term financing line for on lending to Women owned small and medium sized enterprises.

Founded in 2004, YES Bank Ltd. (“YES Bank” or “the Bank”) is the 4th largest private sector bank in India, with an asset base of c.US$20 billion (Q3FY15). It is one of the fastest growing private sector banks, with the bank’s loan book growing at a CAGR of 29%, over the last 5 years. The Bank has steadily diversified and increased its SME and retail portfolio, which presently comprises 32% of its loan book. As part of its strategy, the Bank aspires to increase the proportion of the SMEs to 50% over the next five years.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Support to India''s Renewable Energy and Climate Change goals: The project will support a wide range of renewable energy and climate change related projects. The long term funding will be on terms that are consistent with the underlying cash flow profile of such long gestation and capital intensive projects.

Development of the Green Bond Market: IFC''s investment will generate support and confidence in the Green Bond market which is a new asset class in India and help create a new and viable source of long term financing for climate change projects in the domestic markets. The development of the Green Bond Market will provide an impetus to the development of the overall local currency bond market which is a high developmental priority for IFC and for the Government of India. IFC''s investment in an Emerging Market Green Bond will encourage issuers in other markets to issue Green Bonds and support greater resources for Climate Change finance and development of domestic capital markets.

Increased reach to Women owned MSMEs: Women-owned businesses are less likely to be banked because they tend to be smaller and less formal. The socio-cultural environment, where men are still regarded as the heads of the household owning land and property of the family, makes it difficult for women to present assets as collateral to access finance. While banks perceive women-owned businesses to be higher risk, they often do not recognize the economic and social benefit of banking women-owned businesses, who tend to be more loyal customers, less price sensitive and more risk averse.

Knowledge Transfer: The IFC Financing complements its active and growing knowledge partnership with Yes Bank in the areas of infrastructure finance, small business lending, gender finance, renewable energy finance. IFC expects to engage closely with Yes Bank in these areas both through funding and advisory activities. IFC will share is extensive experience as a Green Bond issuer with Yes Bank to help it build a world class Green Bond Program.

Capital Markets Support: IFC and Yes Bank are looking to explore deeper collaboration in Capital Markets including supporting Yes Bank''s efforts to broaden the range of investors in its offerings of senior debt securities such as Green Bonds. This financing is consistent with and supportive of this overall strategic priority.

E&S Standards: Yes Bank is the only Indian private sector bank that has signed on to IFC''s performance standards on a bank wide basis. IFC''s will continue to be closely involved with Yes Bank to give requisite guidance to help it to conform to the IFC performance standards.

E&S Category Rationale / Risks and Mitigation

T The lending business of the bank involves full spectrum of project finance, large corporates and SME finance as several short term products. Overall, the existing lending portfolio comprises several high risk sector investments such as mining, power, petrochemicals, roads, cement, iron &steel, construction etc. The project will finance green investments/ projects as part of the green bond, which is a subset of infrastructure bond program of RBI. The use of proceeds will finance projects only in the renewable energy sector. Some of these projects may have a potential of generating adverse environmental or social risks or impacts some of which could be widespread, irreversible, and unprecedented. Hence, the E&S risk of the proposed investment is high and the project is categorised as FI-1. The applicable Performance requirements will be i) the IFC- FI Exclusion List; ii) The host country E&S laws and regulations; and iii) the IFC Performance Standards.

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Formalize procedures		Completed		07/29/2015

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