The framework has been independently assessed by a Norway-based second opinion provider.
The framework has been independently assessed by a Norway-based second opinion provider.
The government on Wednesday excluded nuclear power and large hydropower projects of over 25 MW from the purview of investments to be made through issuance of sovereign green bonds, as per the framework approved by Finance Minister Nirmala Sitharaman.
The Union Budget this year had announced plans to issue green bonds as part of the government’s overall market borrowing, which will see investments in public sector projects ‘that help reduce the carbon intensity of the economy.’
The framework has been rated ‘Medium Green’ with a “Good” governance score by CICERO, a Norway-based independent second opinion provider. The ‘Medium Green’ rating is assigned to ‘projects and solutions that represent significant steps towards a long-term vision, but are not yet fully in place’.
Biomass based renewable energy projects as well as all fossil fuel related projects are excluded from the framework, which rely on feedstock from ‘protected areas’.
“Based on their indications of environmental sustainability, green bonds command a relatively lower cost of capital than regular bonds and require reliability and commitments associated with the bond raising process,” the finance ministry said.