New Delhi, Feb 1 (SocialNews.XYZ) Finance Minister Nirmala Sitharaman on Tuesday said that the gover will issue sovereign Green Bonds for mobilising resources for green infrastructure, an announcement lapped up by the environmentalists.
"As a part of the government's overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects, which help in reducing the carbon intensity of the economy," Sitharaman said.
She, however, did not give any details.
"The budget proposal to issue sovereign green bonds has several benefits, principal among which is signalling the country's seriousness in pursuing climate action. India will now join a select group of countries, primarily European, which have issued such bonds," said Gagan Sidhu, Director, Council on Energy, Environment and Water-Centre for Energy Finance (CEEW-CEF),
"We can also expect this move to catalyse the development of the domestic corporate green bond market. Green bond issuances by Indian companies in the overseas debt capital markets have considerably lagged so far. If sovereign green bonds price at lower yields versus their non-green counterparts, it will also provide an added signal for the private sector to direct their own capital towards green investments," Sidhu said.
This important move also ties in with the capital expenditure push -- a key feature of this budget -- and cuts across three of the seven pillars that the Finance Minister highlighted in the budget speech: Energy Transition, Climate Action and Financing of Investments, he pointed out.
Dhruba Purkayastha, India Director, Climate Policy Initiative, said: "The 'Green Bonds' to fund Green Infrastructure is a welcome move as it will help in directing capital to green in a sustainable manner while ensuring management of risks."
This will also help in attracting institutional investors to fund public green investments, he said.
"India's global commitment to Climate Action is highly dependent on the devolution of the action agenda to states and private sectors and the same will require investments in Technology, Access to green capital and most important hard policy stands. The budget has taken the right step with respect to easing access to green finance," Sameer Jain, Managing Director of Primus Partners, a business consultancy firm, said.
Jain, however, warned that without a well-coordinated effort at state levels and institutional arrangements to monitor action, the progress will be slow.
Source: IANS
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