India's first green bonds will focus on supporting solar power projects, followed by wind and small hydro projects . The government expects to issue 160 billion rupees ($1.93 billion) in such bonds between October and March .
As Asia's third largest economy seeks to tap the domestic debt market to finance clean projects, the Indian governments' first ever green bonds will focus on supporting solar power projects, followed by wind and small hydro projects.In the green bond scheme unveiled on Wednesday, the government announced that the proceeds from green bonds will not be used to finance hydropower plants with more than 25 MW, nuclear projects, or any biomass-based power generation from forests.Finance Minister Nirmala Sitharaman announced in the 20222023 budget that the initiative to issue sovereign green bonds would be part of overall market borrowing with the intention of using the funds to create green infrastructure.Between October and March, the government expects to issue 160 billion rupees ($1.93 billion) in such bonds.
For selecting proposals, the committee will be guided by environment specialists and representatives from the ministry of agriculture, forests, and climate change, according to the government.Every year, the committee will select new projects that will be funded by green bonds.The panel will require that the proceeds from the bonds be distributed within 24 months from the date of their issuance.The Indian government had been seeking assistance from the World Bank and CICERO Shades of Green, a Danish company that assists with environmental assessments on green bond frameworks, for its green bond scheme.