Sovereign Green Bonds: Government’s effort to reach net-zero carbon
The announcement of green sovereign bonds (GSBs) in the Budget speech of finance minister (FM) Nirmala Sitharaman is a breakthrough in promoting clean and sustainable investments. India’s ambitious commitment to become a net-zero carbon emitter needs dedicated investments to finance clean infrastructure. It is a praiseworthy step, especially after the recently held Glasgow COP 26, where India has committed to becoming a net-zero carbon emitter. India needs to execute strategic transitioning of its carbon-centred energy infrastructures, which needs devoted investments to finance climate-friendly projects. Indian capital markets are growing in terms of their volumes and have the potential to fund India’s ambitious commitments.
GSBs is a new financial experiment in India and it may require overhauling of related regulatory aspects like ensuring GSBs Remain Green given lack of no uniform guidelines to determine activities that qualify for eligible green projects, leakage of funds towards non-green projects etc.
