$30 billion from $2.7 trillion of green bonds coming from India | Business Upturn

$30 billion from $2.7 trillion of green bonds coming from India

Green bonds make up the majority of the $3.7 trillion total thematic debt, which also includes ESG or environmental, social, and governance bonds, social bonds, sustainability bonds, and green bonds.

In India, cumulative theme debt issuance since 2015 has reached $30 billion until March 2023, according to Neha Kumar, head of the South Asia Program at the Climate Bonds Initiative, who was speaking at the Moneycontrol Policy Next Summit on August 25. The worldwide green bond market is valued at $2.7 trillion and increasing. Additionally, she stated that the majority of the $3.7 trillion total thematic debt, which also includes ESG or environmental, social, and governance bonds, social bonds, sustainability bonds, and green bonds, is made up of green bonds. At a panel discussion on “Building cities of tomorrow: Sustainable renewal and climate financing,” Kumar stated that because Indian cities are not fiscally autonomous institutions and rely on state grants, they are fundamentally unable to raise money.

Municipal bond or green bond issuances are becoming more popular among municipalities, but it’s crucial to be transparent about how the funds will be used. We have always been in the pilot stage when it comes to city level financing in India, the woman claimed. “The market for green bonds has reached $2.7 trillion and is expanding globally. The cumulative issue of thematic debt in India since 2015 is now $30 billion through March 2023, according to data from the Climate Bonds Initiative. The majority are green bonds, but in the past two to three years, social bonds, ESG bonds, and sustainability-related bonds have entered the market. Municipal issuances represent roughly 0.012 percent of India’s overall corporate debt market within the corporate issuance volume. The annual capital investment in urban infrastructure is currently around $10.6 billion, but until 2030, we need to invest $56 billion annually, according to Kumar. According to her, local economic development is essential, and India’s urban economy will stabilize once the country’s rural economy does. Speaking at the event was Arjun Dutt, senior program lead for the CEEW or Council on Energy, Environment and Water. He noted that the viability of projects is important for attracting private investment since funds will flow easily into financially sound infrastructure projects.

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When it comes to the issue of green bonds at the municipal level, cities must address governance, particularly openness and disclosures, if they want to attract foreign investors. The viability of projects is increased by using carbon credits to help create revenue streams, which makes them more appealing to investors, according to Dutt. Chandra Bhusan, CEO of the environmental research organization iForest, also participated in the panel discussion. He stated that peri-urban populations have increased dramatically over the past 30–40 years and that 65–80% of India is already urban. “While the majority of the attention is on what we accomplish within the confines of the municipalities, the fact is that per-urban areas are currently facing serious difficulties. Basic urban infrastructure is lacking. Money is crucial, in my opinion, but we also need to get some of the fundamentals of urban planning and development right, he said.

Aside from money, he continued, there are other factors that contribute to urban issues and creating future cities. The topic of de-ruralization and fast urbanization was brought up by Madhav Raman, principal and co-founder of Anagram Architects. Local issues of de-ruralization may be examined by municipal entities that issue green bonds. Present-day large villages are evolving into small cities. Stabilization of de-ruralization is required. For flooding, there is a great deal of resistance required. When handling de-ruralization and urbanization, the G20 presidency should be done so, he advised.