As many as eight financial institutions in India are to raise funds for expansion of renewable energy capacity through green bonds.
The government has advised these institutions — Export-Import Bank of India, Rural Electrification Corporation, Power Finance Corporation, IDBI Bank, Indian Renewable Energy Development Agency, and private sector entities India Infrastructure Finance Limited, ICICI Bank and Yes Bank — to finance to issue said bonds.
Indian prime minister Narendra Modi has underlined the need for the country to shift to renewable energy.
Most recently, he said in Canada, after the country agreed to supply uranium to India: “The whole world is worried about global warming and climate change.
“People in air-conditioned rooms discuss this issue. But if India succeeds in generating clean energy, one-sixth of humanity will take responsibility for addressing climate change …”
According to media reports, India would be issuing green bonds to foreign as well as domestic investors.
The government of India has made investments in such bonds tax free to encourage funding.
The private sector lender Yes Bank recently raised $150 million — almost double the expected investment — through India’s first green bond issue.
The Exim Bank, too, raised $500 million on its first dollar-denominated green bond issued in India.
Further, even International Finance Corporation had expressed interest in investing in India’s green bonds.
The green bonds are being made attractive to investors by means of very high deposit rates compared with those offered by developed countries — the traditional market for green bonds.
Even the rupee-denominated bonds are fetching good response going by the case with the Yes Bank issue.
India is targeting enhancement of its renewable energy capacity from 35 GW at present to 175 GW by 2022.
The country is looking to increase its solar energy capacity alone by adding another 97 GW.
Ajith Kumar S