Yes Bank : Green Bond Impact Report - FY 2020-21

Green Bond

Impact Report

FY 2020-21

PIONEERING GREEN BONDS IN INDIA

YES BANK: Green Bond Impact Report

Emissions Avoided

Projects financed using proceeds from the Green Bonds issued by YES BANK:

Wind EnergySolar Energy

24	1147MW	47	3188MW
Projects	Combined Capacity	Projects	Combined Capacity

These projects will potentially avoid emissions of harmful gases like CO2, SO2, and NOx

8.16 MT/YR	69.79 KT/YR	21.01 KT/YR
Equivalent to annual	Equivalent to annual	Equivalent to annual
emissions from more than	emissions from more than	emissions from more than
4.04 million passenger	71.84 million passenger	0.49million passenger
vehicles1	vehicles1	vehicles1

Annual Fossil Fuel usage avoided 745.63 KT

Annual Renewable Electricity Generation 8.68 Mn MWh

2	1 Based on estimates of utilization and emission factors for light motor vehicles (passenger) from paper published by Ram Chandra TV &
	Shwetmala in Journal 'Atmospheric Environment' in 2009

YES BANK: Green Bond Impact Report

Executive Summary

2020 came with unprecedented challenge for the entire world. During these times the market momentum for green bonds to finance green projects continued to grow in 2021 and with an issuance of USD 279.8 billion in 2021 and USD 1.38 trillion till date2. Green Bond market showed its resilience in challenging times. According to RBI's Report Green Finance in India: Progress and Challenges-Dated January 2021, the Indian labelled green bond market crossed USD 16.3 billion mark in February 2020. This growing infusion of domestic and foreign finance in the green market is crucial for India to transition to a low-carbon economy.

A pioneer in sustainable finance, YES BANK launched India's first green bond in February 2015, setting the foundation for raising capital for green projects. This was followed by a unique back to back green bond investment with IFC via its Green Masala Bond programme in August 2015. Lastly, the Bank issued its third green bond in December 2016 with FMO, a Dutch development bank. As on 31st March 2020, the Bank has contributed to financing 4.33 GW of wind and solar projects, using the proceeds from its green bond issuances.

This fifth edition of YES BANK's green bond impact report assesses the environmental and social benefits (annual and lifetime) of the three green bonds. These projects would generate 203.46 million MWh of electricity over lifetime, and are expected to avoid 191.25MT of CO2, 1635.81 KT of SO2 and 492.37KT of NOx emissions. Additionally, the projects would help reduce dependency on fossil fuels by potentially decreasing 17.48 MT of fossil fuel usage over the lifetime.

KPMG India has provided assurance services (excerpt on last page) for FY 2020-21, on the use of proceeds of the Green Bonds, in accordance with the Green Bond Principles

2 Green Bond Database Climate Bond Initiative

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YES BANK: Green Bond Impact Report

YES BANK:

Pioneer of Green Bonds in India

The Government of India has set for itself an ambitious goal of increasing national Renewable Energy (RE) capacity to 175 GW by 2022, stimulating unprecedented growth in the RE sector. However, such development and growth requires proportionate financial support and thus an evolution of innovative instruments was underway to effectively mobilize finance for meeting the growing demand of RE sector. Understanding the plethora of opportunities in positive impact sectors and the effectiveness of green bonds in channelizing investments to green infrastructure projects, YES BANK saw a valuable opportunity in introducing green bonds as an effective green financing mechanism in India.

Since India's first issuance of green bond by YES BANK in February 2015, issuances have been witnessing a steady growth, making India one of the top ten largest green bond markets globally. The Bank has issued three green bonds since 2015, which are playing a critical role in India's sustainable growth through financing renewable energy projects in various parts of the country.

YES BANK, since inception in 2004, through its 'Responsible Banking' ethos has believed in creating sustained value for its stakeholders, through social, economic and environmental dimensions.

February 2015

August 2015

December 2016

The bank issued India's first-ever Green Infrastructure Bonds (AA+ by CARE), raising an amount of INR 1000 crores (USD 160 million). This 10 year tenor bond witnessed strong demand from leading investors including Insurance companies, Pension & Provident Funds, Foreign Portfolio Investors, New Pension Schemes and Mutual Funds

The Bank raised INR 315 crores (USD 50 million), through the issue of Green Infrastructure Bonds to International Finance Corporation (IFC), on a private placement basis which is the first investment by IFC in an Emerging Markets Green Bond issue, in the world. The bonds are for a tenor of 10 years. IFC paid for the placement using the proceeds from its first Green Masala Bond program that aimed at raising capital in the offshore rupee market. Notably, the bond was awarded the "most innovative bond structure" by Environmental Finance in May 2016

The Bank raised INR 330 crores (USD 50 million), through an issue of a 7-year Green Infrastructure Bonds to FMO, the Dutch Development Bank, on a private placement basis. This is FMO's 1st Investment in a Green Bond issued by a bank in India. Proceeds from FMO's sustainability bonds are invested in this green bond

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Green Bond

Principles

The Green Bond Principles (GBP) are voluntary process guidelines intended for broad use by the market that recommend transparency and disclosure, and promote integrity in the development of the Green Bond market. The GBP outlines four key elements namely use of proceeds; evaluation and selection of eligible projects; management of proceeds; and reporting.

YES BANK: Green Bond Impact Report

YES BANK has instituted internal guidelines for adherence to the Green Bonds Principles 2018, elucidated below:

Use of Proceeds	Evaluation and Selection of
The proceeds raised through the issue of these	Eligible Projects
bonds/debenture are primarily used in	YES BANK has put in place a process for
renewable and clean energy projects including	identifying project based on eligibility criteria, and
generation from sources such as wind and solar	evaluating them for allocation of the bond
projects.	proceeds, through mapping relevant teams with
	process-specific roles and responsibilities.

Management of Proceeds	Reporting
The proceeds are managed by an internal MIS,	An annual communication update is made
which also tags the projects to which the	available to the stakeholders, primarily investors.
proceeds are channelled and monitors them	This includes information on allocation of
throughout the tenor. The unallocated proceeds,	proceeds, list of the funded projects, their brief
if any, are placed in temporary market	description, summery of the impacts associated
instruments on a quarterly basis.	with these projects and type of temporary
	investment instruments for the balance of
	unallocated proceeds.

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