Union Finance Minister Nirmala Sitharaman on Tuesday announced plans to issue sovereign ‘green bonds’, a concept catching up globally, to move towards carbon neutrality.
“As part of the government’s overall market borrowings in 2022-23, sovereign ‘green bonds’ will be issued for mobilising resources for green infrastructure,” she said.
“The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy,” Ms. Sitharaman said. “The ‘green bond’ market is globally expanding at a fast pace, and this will help India access long-term funds at competitive rates. This will also improve the ESG climate in the country,” said Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.
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Industry reactions
Reacting to the provision in the Budget, Sumant Sinha, Chairman & CEO, ReNew Power Pvt. Ltd. said, with this India has laid the groundwork for its ambition to be a net zero country by 2070. “It is great to see that the government has very firmly put energy transition and clean energy at the heart of India’s economic growth and looks to address some of the most challenging aspects of this transition,” he said.
“Sovereign ‘green bonds’ are also very welcome, which can help mobilise financial resources for distribution companies as well as for clean energy investors,” he added.
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