The Finance Ministry has released the framework to issue sovereign green bonds in line with global standards. The framework will be used to fund green projects falling under ‘Eligible Categories’ such as renewable energy, clean transportation, sustainable water and waste management, pollution prevention and control, green buildings. The framework provides flexibility of rollover of unutilised funds for two consecutive years.
On October 28, CNBC-TV18 had reported that the government could finalise the framework of the green bonds in around a week.
The government intends to mobilise Rs 16,000 crore 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.
Finance Minister Nirmala Sitharaman in her Budget speech this year had announced that the government proposed to issue sovereign green bonds to mobilise resources for green infrastructure.
"The proceeds will be deployed in public sector projects, which help in reducing the carbon intensity of the economy," she said during the Union Budget.
The government is planning a total borrowing of Rs 5.92 lakh crore during the October-March period of the current fiscal.
Green bonds are such financial instruments that generate proceeds for investment in environmentally-sustainable and climate-suitable projects.
Para 103 of the Budget calls for introduction of Sovereign Green Bonds. “As a part of the government’s overall market borrowings for the period 2022-23, Sovereign Green Bonds will be issued for mobilising resources for green infrastructure," stated the press release released by the Finance Ministry.
Moreover, CICERO, the Norway-based SPO, has rated India’s Green Bond Framework as “Medium Green” with “Good” governance rating. IFC, ADB and Germany are also rated Medium Green by the same reviewer.
Green Bonds Framework will be made public today and published on the Ministry of Finance website. This sets the stage of green bonds issuance in the coming months, added the release.
First Published: Nov 9, 2022 4:57 PM IST