The framework is close to the footsteps of India’s Panchamrit commitments as outlined by Prime Minister Narendra Modi at COP26 in Glasgow in November 2021. The adoption is in fulfillment of an announcement made in the Union Budget 2022-2023. Union Finance Minister that government green bonds will be issued to mobilize resources for green projects.
Green bonds are financial instruments that generate investments in environmentally sustainable and climate-friendly projects. Green bonds demonstrate environmental sustainability, have a relatively lower cost of capital than conventional bonds, and require credibility and commitment to the bond procurement process.
In the above context, India’s first government green bond framework was formulated and as per the provisions of the framework, a Green Finance Working Committee (GFWC) was constituted to confirm key decisions regarding issuance of government green bonds.
In addition, CICERO, an independent and globally renowned Norwegian Second Party Opinion (SPO) provider, was appointed to assess India’s green bond framework and certify the framework’s compliance with ICMA’s Green Bond Principles and international best practices. After due consideration and consideration, CICERO has rated India’s green bond framework as ‘medium green’ with a ‘good’ governance rating.