Over a year ago, Sebi's board had approved detailed draft norms for issuance and listing of Green Bonds in the stock market to help meet the huge financing requirements worth USD 2.5 trillion for climate change actions in India by 2030.
However, the final guidelines are hanging in balance since then for want of certain inputs from the government side, a senior official said.
"Sebi had sent a draft of the proposed guidelines to Ministry of Finance for their comments. After discussion with concerned departments, the Finance Ministry had forwarded comments of the Ministry of Environment, Forest and Climate Change to the markets regulator.
"However, Sebi was informed that the MNRE's comments were still awaited and would be forwarded to the markets regulator immediately upon receipt of the same," the official said.
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The new norms would also help the investors take informed investment decisions and bring in uniformity in the disclosure requirements, Sebi had said in a statement in January last year after its board approved the proposal in this regard.
Financing needs of renewable energy space in the country requires new channels to be explored, which can also help in reducing the cost of the capital.
Issuance and listing of green bonds will be governed by the Sebi regulations for debt securities but the issuer of green bonds will have to make incremental disclosures.
These norms would also provide for requirement of independent third party reviewer, certifier or validator for reviewing, certifying and validating the pre-issuance and post-issuance process, including project evaluation and selection criteria. However, this has been kept optional.
The issuer will have to provide the details of systems and procedures to be employed for tracking the proceeds, the investments made and earmarked for eligible projects. The same would need to be verified by external auditors.
As of now, there are no standard norms for green bonds.
According to Sebi, green bonds can help enhance an issuer's reputation and attract a wider investor base, while benefiting the issuers in terms of better pricing of their bonds compared to a regular bond.
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