One of the world’s largest rail networks is planning to raise funding through green bonds to finance development of renewable energy infrastructure.
Indian Railways is expected to issue its first green bonds to finance project development in accordance with the capacity addition targets announced this year. According to officials of the Ministry of Railways, details about the green bonds issuance are being worked out and will soon be made public.
As per the updated National Solar Mission, which envisages 100 GW of operational solar power capacity by March 2022, the Indian Railways has also set a target to install 1 GW of solar power capacity. It is expected to use un-utilised land it owns to set up large-scale solar power projects.
The projects are expected to be set up with support from the Ministry of New & Renewable Energy through financial assistance from the National Clean Energy Fund.
The Indian Railways, earlier this year, introduced solar power panels atop coaches. These solar power systems are used to supply electricity for air-conditioners, fans, and lighting.
Green bonds have emerged as a very attractive investment as well as fund raising instrument in India this year. The Indian Government has reportedly asked at least 8 financial institutions to raise funds for renewable capacity expansion. These funds are expected to be raised through issuance of green bonds.
Public sector entities like Rural Electrification Corporation, Power Finance Corporation, IDBI Bank, Indian Renewable Energy Development Agency, and private sector entities like India Infrastructure Finance Limited, ICICI Bank, and Yes Bank, have all been asked to issue green bonds to raise funds for renewable energy projects.
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