Securities Exchange Board of India (SEBI) has just mooted[moot(consider,प्रस्तुत करना)] new guidelines for Green Bonds. We have already had a few Green Bond issues by Indian firms such as Yes Bank and Exim Bank.
Green bonds are debt instruments that raise money to fund clean energy projects. Companies that raise money through these bonds have to invest it only in areas that are environment-friendly such as renewable energy, waste management, clean transport or sustainable land use. In February this year, Yes Bank became the first Indian entity to raise money through green bonds, raising ₹1000 crore from insurance companies, pension funds, mutual fund houses and foreign portfolio investors to fund solar, wind and biomass projects. Later, in March, the EXIM Bank raised about $500 million from international investors through green bonds. Recently, CLP India- a power company raised about ₹600 crore for its wind business through these bonds. SEBI’s recent proposals on green bonds call for additional disclosures from the issuers of these bonds detailing where exactly the funds will be deployed.
According to World Bank estimates, even if the world gets warmer by two degrees Celsius in the next 20 or 30 years, there will be an acute[u'kyoot(sharp,तीखा)] shortage of food and water in Asia and Africa. That calls for avoiding greenhouse emissions and cutting back on fossil fuel. But as energy is indispensable[in-di'spen-su-bul(essential,आवश्यक)] for development, countries are scrounging[skrawn(look,collect,देखना)] for alternate ways to fuel their homes and industry. One way out is to add to renewable energy capacity. A Cardinal[kaad-n(u)(key,मुख्य)] barrier in developing clean energy technologies is lack of funds for research and development. It is to address this issue that ‘green bonds’ were first floated.
India is turning its attention to Green Bonds lately given its pledge[plej(promise,वादा)] at the G20 to significantly shift its energy sources from fossil fuels to clean energy. India currently has just 30 gigawatt of renewable energy capacity and intends to build as much as 175 gigawatt capacity by 2022. Estimates are that for this kind of additional renewable energy capacity, a total investment of about $200 billion would be required. Given the massive investments required, this will need to be supplemented by colossal[ku'ló-su(large,बड़ा)] amounts of private capital. This is sought to be addressed through Green Bonds.
Green Bonds will also allow issuers to tap into pools of global capital dedicated to ethical climate change and green investing. If Green Bonds manage to reduce capital costs for renewable energy projects, green energy may be produced more tattily[tat-i-lee(cheaply,सस्ता)].
If Green bonds help funnel more greenbacks into India’s renewables sector, that’ll mean a immaculate[i'ma-kyu-lut(cleaner,साफ़)] environment for Gen-Next.
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