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Indian Regulator Proposes New Norms For Listing Green Bonds On Stock Exchange

India’s securities market regulator has finally taken steps to match the government’s eagerness to promote green bonds to support development of low-carbon infrastructure in the country.

The Securities and Exchange Board of India (SEBI) recently approved that new norms for issuance and listing of green bonds shall be opened for public discussion. The new norms will open up an entirely new debt investment avenue for common investors in the country.

At the meeting, SEBI stated that “approved the proposal for initiation of public consultation process for disclosure requirements for issuance and listing of Green Bonds, which are in line with the requirements as provided in Green Bond Principles as recommended by International Capital Market Association.”

Green bonds are a completely new investment avenue in India, with the first green bond in India launched by Yes Bank in February earlier this year. Since then several other institutions have successfully raised several hundred of millions of dollars.

The Indian Government has directed several institutions and organisations to issue green bonds to support the development of renewable energy projects. Public sector entities like the 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.

Additionally, Indian Railways, one of the world’s largest railway networks, and NTPC Limited, India’s largest power generation company, are also likely to issue green bonds to develop their own renewable energy projects.

Over the last few months, corporate bonds have seen huge demand from investors as the Reserve Bank of India has reduced the base lending rates. Issuance of green bonds are thus expected to attract significant interest from investors.

According to media reports, regulations related to listing of renewable energy yieldcos were also discussed during the same meeting.

 
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Written By

Smiti works as a senior solar engineer at a reputed engineering and management consultancy. She has conducted due diligence of several solar PV projects in India and Southeast Asia. She has keen interest in renewable energy, green buildings, environmental sustainability, and biofuels. She currently resides in New Delhi, India.

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