Rupee-denominated green bond issuances are anticipated to gain momentum from this financial year, following the government’s bond issuance for the second consecutive year, Dinesh Khara, chairman of State Bank of India, mentioned on Monday.
“Corporate rupee-denominated green bond issuance is expected to accelerate from financial year 2024 with the government initiating the issuance of sovereign green bonds,” Khara stated at the FICCI ESG Summit.
The government issued green bonds worth Rs 20,000 crore in the last financial year, which formed part of its borrowing programme, and an additional Rs 20,000 crore will be raised through such bonds in FY24.
He highlighted that India began green bond issuances in 2014, has garnered Rs 43 billion through green bonds and has been instrumental in augmenting the adoption of renewable energy.
India aims to become a net-zero carbon emissions economy by 2070 and intends to source 50 per cent of its energy from non-renewable sources by 2030, Khara noted.
“To attain the short-term target by 2030, India will necessitate an annual investment of roughly $110 billion. The investment required to chart the net-zero emission roadmap will be considerably greater,” added Khara.
Recently, State Bank of India (SBI) devised strategies to quantify the carbon footprint of its Rs 33 trillion loan portfolio at the account level. This initiative seeks to offset climate risks and promote sustainable financing.
“At the bank level, we’ve initiated a risk matrix where we attribute some credits to those adopting green initiatives in their ventures,” Khara mentioned.
Discussing the necessity for a policy framework promoting awareness of the green finance ecosystem in India, he said, “Chartered accountants should introduce auditing standards to assist corporates in procuring annual data related to green initiatives and their results.”
He further emphasised the significance of deepening the bond market, standardising green investment, consistent corporate reporting, and eliminating information asymmetry to address the challenges in the green finance market.
Separately, speaking at the same event, Ashutosh Khajuria, executive director of private sector lender Federal Bank, revealed that the bank aims for a green loan disbursal of Rs 13,000 crore by financial year 2024-25 with current sanctioned funds at Rs 7,490 crore and outstanding at Rs 5,083 crore.