Lending agencies should issue dedicated 'green bonds' in India
Shri Upendra Tripathy, the Secretary of the Ministry of New and Renewable Energy in India, said that "it is now up to lending agencies to help bring down the cost of capital and technology" to help the Government reach its renewable energy target of 175GW of capacity by 2022. Tripathy urged lending agencies to take responsibility for funding renewable energy projects by issuing dedicated 'green bonds' at a Ficci conference.&nbsp;Ulrik Ross, HSBC's&nbsp;UK's Managing Director and Global Head of Public Sector &amp; Sustainable Financing, said "HSBC believes that scale in the green bond market can only be reached by introducing government sponsored incentive structures for green bonds, and we believe India has the ability to do so."
NEW DELHI: Lending agencies need to bring down the cost of capital for renewable energy projects after the government created conditions for the purpose, New and Renewable Energy Secretary Upendra Tripathy has said."The government has put in place an elaborate ecosystem to support green projects and it is now up to lending agencies to help bring down the cost of capital and technology to realize the target of generating 170,000 MW of renewable energy," Tripathy said while addressing a Ficci conference on 'Green Bonds' here.India has set a target of 175 GW of renewable energy capacity by 2022, which includes 100 GW of solar power , 60 GW of wind power, 10 GW of biomass-fired power and 5 GW of small hydro power.He further said that the cost of credit is the most crucial component for undertaking renewable energy projects as the cost of technology is difficult to bring down unlike other inputs such as land and manpower costs.He urged lending agencies, including banks, financial institutions and NBFCs, to take ethical responsibility for funding green projects by issuing dedicated 'green bonds'.Tripathy enumerated various initiatives of the central government to make funding of renewable projects such as the 25-year power purchase agreement, establishment of escrow account, concessional excise and customs duties and setting up of a green energy corridor for evacuation of power, priority sector lending for renewable energy projects up to Rs 15 crore, home loans clubbed for rooftop projects, etc.HSBC Bank Plc, UK's Managing Director and Global Head of Public Sector & Sustainable Financing, Ulrik Ross said, "HSBC believes that scale in the green bond market can only be reached by introducing government sponsored incentive structures for green bonds, and we believe India has the ability to do so."Ficci Director General Arbind Prasad said, "Green bonds are an attractive investment proposition with an opportunity to support climate-related projects."Thus, exploring the role of green bonds in the Indian market and suggesting a framework to develop the financial system would provide the roadmap for the Indian financial landscape."