The Indian Government has released the framework to issue sovereign green bonds in line with global standards. These first-ever green bonds of the Indian Government will focus on funding solar power projects, followed by wind and small hydro projects, as Asia’s third-largest economy attempts to tap the domestic debt market to finance clean projects.
Green Bond is a debt instrument that is specially reserved to raise money for climate and environmental projects. The Government intends to mobilise Rs. 16,000 cr ($ 1.93 bn) from the issuance of green bonds during the second half of the current financial year. It is a part of the borrowing programme for the second half of this fiscal.
Green bonds are such financial instruments that generate proceeds for investment in environmentally-sustainable and climate-suitable projects. Green Bonds Framework was published on the Ministry of Finance website. This sets the stage for green bonds issuance in the coming months.
A green finance working committee headed by the Chief Economic Adviser V Anantha Nageswaran will select public sector projects for green financing from those submitted by government departments. The committee will annually identify fresh projects to be funded through green bonds.
The panel will ensure proceeds from the bonds will be allocated within 24 months from the date of issuance. The Indian Government had sought assistance for its green bond framework from the World Bank and CICERO Shades of Green, a Danish firm that helps with environment assessments on green bond frameworks.
It is pertinent to mention here that sustainable financing is a thrust area for various stakeholders now and the textile industry is also looking for the same.
