Green Bonds: Finance Minister Nirmala Sitharaman approved the Sovereign Green Bond Framework


India Sovereign Green Bonds Framework: Finance Minister Nirmala Sitharaman has approved the country’s first Sovereign Green Bonds Framework. With this approval, it will further strengthen India’s commitment to the goals of the Paris Agreement, which will help attract global and domestic investment in green projects. The money raised by issuing Sovereign Green Bonds will be invested in public sector projects which will help in reducing the carbon intensity of the economy.

It is believed that the government can raise Rs 16,000 crore through green bonds. And green bonds can be issued in the second half of this financial year. These bonds will be of long duration keeping in mind the green infrastructure projects.

This framework, according to the Ministry of Finance, will be implemented by the Prime Minister at COP26 in Glasgow in 2021. Narendra Modi In line with India’s commitments under the vision of “Panchamrit”. Presenting the budget for 2022-23, Finance Minister Nirmala Sitharaman had talked about raising resources for green projects by issuing sovereign green bonds.

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Sovereign Green Bonds are financial instruments that raise funds to invest in environmentally sustainable and climate-resilient projects. Sovereign Green Bonds offer relatively lower cost of capital than regular bonds.

Keeping this in mind, India’s first Sovereign Green Bond Framework has been prepared and as per the provisions of the framework, Green Finance Working Committee (GFWC) was constituted to validate important decisions on issuance of Sovereign Green Bonds. Norway’s Cicero was selected to evaluate India’s green bond structure. Cicero has rated India’s Green Bond Framework as ‘Medium Green’ with a good score.

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