The aim of this consideration is to increase the interest of investors in green bonds, which is necessary to meet the requirements for financing for clean energy goals.
“Although the sovereignty green bonds have been launched a few years ago, they have to be picked up. Now the interest rate of green bonds and other bonds is largely similar. So there is no motivation for green bond buyers when the bonuses are low..
Green bonds have appeared as a popular investment tool for climate financing around the world. They fund projects with a positive environmental impact and at the same time offer investors’ revenues. These bonds are issued by public, private or multilateral entities to obtain capital for initiatives that contribute to a more sustainable economy and create an identifiable climate, environmental or other benefits. Green Bonds Fund projects such as renewable energy, energy efficiency, clean transport, protection and certified green buildings.
Market development
In India, green bonds are issued by an Indian reserve bank known as sovereign green bonds. State financial institutions, including Rec LTD, Power Finance Corp and Indian Renewable Energy Development Agency (IREDA), are among the main issuers of green bonds in the country along with corporations.
Saurabh Agarwal, a tax partner, Ey India, said: “Green bond tax incentives would represent a strategic and critical political tool for crossing net energy in India. Thanks to more lucrative bonds, the government can effectively direct a significant volume of private capital towards ambitious sustainability goals.”
He added that targeted fiscal measures will be helpful in attracting additional financing needed to support the energy transition and ensure that capital markets play a key role in building a durable and sustainable future of India.
The Energy Resources Institute (Teri) report last year, which quoted an initiative for climatic bonds, India had approximately $ 15.7 billion unmarked bonds included in the climate used for low -carbon transport and renewable energy assets. Officially, India entered the Green Bonds market in 2015, with YES Bank issued the first green bond for 10 years to finance renewable energy projects. Since then, several banks and businesses have entered the market.
Growth potential
The report noted that despite promising prospects in the last few years of issuing green bonds in India, it has progressed slowly. At the macro level, the Indian bond market is currently under the nascent phase and coupon coupons of Indian green bonds, mainly in the range of 2.75-6% for issuing denominations and between $ 7.5-10% for issuing denominations. This difference arose from the currency risk associated with the cost of ensuring rupees due to the volatility of the currency and low liquidity and trading on the Indian secondary market.
“For example, two tranches of sovereign green bonds issued by the Indian government in 2023 were initially able to get a” Greenium “or the price advantage for publishing a local currency – reflecting cheaper financing and designing a strong appetite to lose and release, lost,” she said, “says,” ” “It’s”, “it is,” it is stated. Greenium or Green-Primemium is an issuing of issuer due to a lower payment of coupon for investors for green bonds compared to conventional bonds.
He added that the strategies of policies and market interventions to speed up the growth of green bond markets in India require an understanding of factors that control the demand and supply of green bonds and factors allowing their green bonuses over common corporate bonds.
Thanks to its plan to achieve capacity of 500 GW production by 2030 and by 2070 by 2070, the parties involved believe that there is a huge potential for green bond market growth.
India’s position
The CLIMATE BONDS INITIATIVE initiative, an international non -governmental organization mobilizing global capital for climate action, said in June this year in statement that India ranks the fourth largest developing market source of aligned green, social, sustainability and sustainability (GSS+) 2021.
Since January 2023, the Union’s government has issued eight sovereign green bonds in total £47 700 crore ($ 5.7 billion). The government has announced that it will introduce sovereign green bonds in the FY23 budget to gain greater capital to limit the climate change and the need to transition to energy.
Questions sent to the Ministry of New and Renewable Energy and Finance remained unanswered until the press.
(Tagstotranslate) Green Bonds
