IANS | 09 Nov, 2022
The Central government on Wednesday approved the final sovereign green
bonds framework of India, which will further strengthen the nation's
commitment towards its Nationally Determined Contribution (NDCs)
targets.
These targets were adopted under the Paris
Agreement and help in attracting global and domestic investments in
eligible green projects.
The proceeds generated from issuance of
such bonds will be deployed in public sector projects which help in
reducing carbon intensity of the economy.
Finance Minister
Nirmala Sitharaman had announced in her budget speech on February 1 this
year that sovereign green bonds will be issued for mobilising resources
for green projects.
Green bonds are financial instruments that
generate proceeds for investment in environmentally sustainable and
climate-suitable projects.
By virtue of their indication towards
environmental sustainability, green bonds command a relatively lower
cost of capital vis-a-vis regular bonds and necessitates credibility and
commitments associated with the process of raising bonds.
In the
above context, India's first sovereign green bonds framework was
formulated and as per its provisions, a Green Finance Working Committee
(GFWC) was constituted to validate key decisions on issuance of such
bonds.
