Funds will be used to retire foreign currency and rupee loans; balance will go towards capex and other purposes
The International Finance Corporation (IFC) sees immense opportunities to finance projects through green bonds in India especially in areas like urban transportation, waste-to-energy and water treatment, its senior official said here Tuesday. "Opportunities in India are huge. Look at infrastructure and amount of urbanisation and the level of agriculture (projects)," said Vivek Pathak, Director for East Asia & Pacific Department at the IFC. The projects he identified include development of urban transportation, waste-to-energy, water treatment and green building. Noting that more and more financial institutions have been issuing green bonds in India, he said: "There is increasing awareness. The solar and wind sector have done very well in India and I think the opportunities are going to be huge in India." However, identifying such projects for green bonds is a challenge everywhere and India is no different, he told reporters. Pathak was talking on the sidelines of the creation of .
Green bonds have a huge demand, but at a time of global uncertainties, investors are asking for an 'uncertainty premium' for lower rated and niche players.
Green bonds are normal bonds, but the proceeds are used for renewable energy projects, or for services that are ecologically sustainable
Issuance from India was to the tune of $1.95 billion in the September quarter
Green bonds refer to bonds issued mainly by power companies to finance energy efficient projects
In its statement, IFC said India needs $2.5 trillion to meet its climate change mitigation targets
A green bond is like any other bond where a debt instrument is issued by an entity for raising funds from investors