New Delhi:
Economy Minister Ajay Seth says the green government bond issuance is part of the government’s overall lending program and has said these rupee-denominated papers will have a long maturity to meet the requirements of green infrastructure projects.
Finance Minister Nirmala Sitharaman announced in her budget speech that the government is proposing to issue green government bonds to mobilize resources for green infrastructure.
“The proceeds will be used for public sector projects that help reduce the carbon intensity of the economy,” she said, presenting the 2022-23 budget.
Mr Seth said this is part of the total loan for the next financial year.
“Right now we are looking at the domestic markets and they are denominated in rupees… the tenure would normally be like any G-sec tenure. It would be medium to long term but not short term. The mobilized fund will be used in the infrastructure sector, which needs long-term finance,” he informed.
Before making a decision on quantum, the economy minister said the RBI will come up with a framework that will include details about projects or sectors eligible for funding under the government’s green bonds.
In addition, he said the guidelines will include details regarding overseeing the use of funds in green or lower carbon-emitting areas and guarantees for investors.
“This is not a general purpose loan. These will be targeted loans. We will come up with a framework in the coming months. It is not a one-year instrument, but there will be more need for such an investment, and more eagerness from the investors in the area in the coming years,” he said.
In 2022-23, the government plans to borrow a record amount of Rs 11.6 lakh crore from the market to meet its spending requirement to support the economy hit by the Covid-19 pandemic.