New Delhi: The Finance Ministry has finalised the framework to issue sovereign green bonds in proportion to global standards, source said..
As apart of the borrowing programme for the second half of this fiscal, the government intends to mobilise Rs 16,000 crore from the issuance of green bonds during the second half of the current financial year. The framework is ready and it would be endorsed soon, the sources said.
These rupee-denominated papers will have long tenure to suit the requirement of green infrastructure projects, they said. The issuance would be in line with the Budget announcement. Finance Minister Nirmala Sitharaman in her Budget Speech this year announced that the government proposes to issue sovereign green bonds to mobilise resources for green infrastructure. "The proceeds will be deployed in public sector projects, which help in reducing the carbon intensity of the economy," she said in the Budget 2022-23.
The government intends to borrow Rs 5.92 lakh crore from the public over the current fiscal's October-March period. In its budget for 2022–2023, the government predicted gross market borrowing of Rs. 14.31 lakh crore. As a result, it decided to borrow Rs 14.21 lakh crore between 2022 and 2023, which is Rs 10,000 crore less than the budget's projection.
According to a plan approved by the finance minister Nirmala Sitharaman, the government's first green bond issuance will concentrate on funding public projects across nine sectors, including renewable energy, clean transportation, climate change, sustainable water and waste management, and pollution control.
However, nuclear projects, hydropower plants larger than 25 MW, and any biomass-based power generation using biomass from protected regions will not be financed with the money collected through the green bonds. In the second half of FY23, the Center hopes to raise Rs 16,000 crore through green bonds from the domestic debt market.
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