FM Nirmala Sitharaman okays framework for Sovereign Green Bonds
New Delhi, November 9
Union Finance Minister Nirmala Sitharaman on Wednesday approved the final Sovereign Green Bonds framework of India. This approval will further strengthen India’s commitment towards its Nationally Determined Contribution (NDC) targets, 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, said an official statement.
The Framework comes close on the footsteps of India’s commitments under “Panchamrit” stated by Prime Minister Narendra Modi at COP26 at Glasgow last year. The approval is also the fulfilment of the announcement in the Union Budget 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. Due to their inclination towards environmental sustainability, they command a relatively lower cost of capital vis-à-vis regular bonds and necessitates credibility and commitments associated with the process of raising bonds, the statement said.
Will finance green projects
The proceeds generated from issuance of Sovereign Green Bonds will be deployed in public sector projects which help in reducing carbon intensity of the economy
