Government has said that the proposed green bonds will be of longer tenureNew Delhi: Asserting that the issuance of sovereign green bonds is part of the government’s overall borrowing programme, economic affairs secretary Ajay Seth has said these rupee-denominated papers will have long tenure to suit the requirement of green infrastructure projects.Finance minister Nirmala Sitharaman in her budget speech announced that the government proposes to issue sovereign green bonds to mobilise resources for green infrastructure.”The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy,” she said while presenting the budget for 2022-23.Mr Seth said this is part of the overall borrowing for the next financial year.”At this point of time, we are looking at the domestic markets and rupee-denominated…the tenure would be normal like any G-sec tenure. It would be medium to long term but not short term. Fund mobilised will be used in the infrastructure sector, which has a requirement of long term finances,” he informed.Before taking a decision on quantum, the economic affairs secretary said the RBI will come out with a framework, which will have details about projects or sectors that would qualify for funding under the sovereign green bonds.Besides, he said the guidelines will have details related to the monitoring of fund usage in green or less carbon-emitting areas and assurances for investors.”This is not a general-purpose borrowing. These are going to be purpose-oriented borrowing. We will come out with a framework in the coming months. It’s not a one year instrument but there will be more need for such an investment, and more eagerness of the investors in the area in the coming years,” he said.During 2022-23, the government plans to borrow a record Rs 11.6 lakh crore from the market to meet its expenditure requirement to prop up the economy hit by the Covid-19 pandemic.
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