Finance Minister Nirmala Sitharaman has approved the final Sovereign Green Bonds framework of India. Green bonds are financial instruments that generate proceeds for investment in environmentally sustainable and climate-suitable projects. This approval will further strengthen India's commitment towards its Nationally Determined Contribution targets, adopted under the Paris Agreement. It will help in attracting global and domestic investments in eligible green projects.
This approval will further strengthen India's commitment towards its Nationally Determined Contribution targets, adopted under the Paris Agreement. It will help in attracting global and domestic investments in eligible green projects. the proceeds generated from the issuance of such bonds will be deployed in Public Sector projects which help in reducing carbon intensity of the economy.
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With this approved Sovereign Green Bonds the commitment of the government for the Country will give strength to it's Determined Contribution targests unnder Paris Agreement. With the help of this investments of Domestic and Foreign companies will increase in projects related to increase the green environment.
The Finance Ministry said, the framework comes close on the footsteps of India's commitments under Panchamrit as elucidated by Prime Minister Narendra Modi, at COP 26 at Glasgow in November last year. The Minsirty has constituted a green Finance Working Committee (GFWC) wit representation from relevant Ministeries and chaired by Chief Economic Adviser, Government of India.
The committee will meet at least twice a year to support Ministry of Finance with selection and evaluation of projects. The allocation of the proceeds will be reviewed in a time-bound manner by the GFWC to ensure that the allocation of proceeds is completed within 24 months from the date of issuance.
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In a press release issued by Ministry of Finance, it has been said:
"Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman approves the final Sovereign Green Bonds framework of India. this approval will further strengthen India's commitment towards its Natioally Determined Contribution (NDCs) 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.
The Framework comes close on the footsteps of India's commitments under "Panchamrit" as elucidated by the Prime Minister, Shri Narendra Modi, at COP 26 at Glasgow in November, 2021. the approval is fulfillment of the announcement in the Union Budget FY 2022-23 by the Union Finance Minister that Sovereign Green Bonds will be issued for mobilising resources for green projects.
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What are green Bonds?
Green bonds are financial insruments that genrate proceeds for investment in environmentally sustainable and cimate-suitable projects. By virtue of their indication towards environmental sustainability, green bonds command a relatively lower cost of capital e.g: regular bonds and necessitaties 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 the provisions of the framework, Green Finance Working Committee (GFWC) was constituted to validate key decisions on issuance of Sovereign Green Bonds."
A brief note from the press release by Finance Ministry:
"Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman approves the final Sovereign Green bonds framework of India. this approval will further strengthen India's commitment towards its Nationally Determined Contributions (NDCs) targets, adopted under the Paris Agreement, and help in attracting global and domestic investments in eligible green porjects.
In the above context, India's first Sovereign Green Bonds framework was formulated and as per the provisions of the framework, Green Finance Working Committee (GFWC) was constituted to validate key decisions on issuance of Sovereign Green Bonds."
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