HSBC India is planning to launch ‘green bonds’ this year to enable fund raising for investments in projects with environmental benefits, the private sector bank’s Chairman Naina Lal Kidwai said today.
“HSBC is the world’s fourth largest issuer of green bonds. We are big player. We are working to get this in India.
We are working with key authorities on this issue. Most probably we will launch this year,” Kidwai told reporters on the sidelines of a Ficci event.
She did not divulge the size of green bonds saying that the discussions on the new product are at a nascent stage.
Globally, the green bonds market has tripled to USD 37 billion in last two years, Kidwai said, adding that India’s market for these bonds is “just the tip of the iceberg” and there is scope to grow.
Some banks like Axis Bank and Yes Bank have come out with such bonds. In February, Yes Bank had raised Rs 1,000 crore against a targeted Rs 500 crore by issuing green infrastructure bonds.
Besides green bonds, Kidwai also emphasised on creating ‘Yieldcos’ that enable access to low cost liquid and generate predicable cash flows by bundling up renewable assets with long-term power purchase agreements.
“For Yieldcos, we need large amount of support from regulatory SEBI. We hope it clears the way for this product soon,” she added.
Kidwai said both green bonds and yieldcos hold a promising way to mobilise investment for green projects at a time when the country is aiming at 100 gigawatt of renewable energy.
She also called for immediate steps to make the transition to a low carbon economy, stating that apart from increasing productivity, it will allow India to enjoy cleaner air, live in more compact, connected and coordinated cities and have wider access to water and electricity.
Kidwai, who is also a member of United Nations Environment Programme (UNEP) Inquiry International Advisory Council, said that financial institutions have a role to play and can help finance the transformation to a clean, sustainable future.
In a video message, Environment Minister Prakash Javdekar said India is committed to “use what is needed, not what is produced and use only the required quantity” of natural resources and completely avoid waste.
The minister said the world needs to accept that changes would be required in lifestyles so that “we are able to give to our future generations a bit more than what we have inherited”.
India, he said, was doing its bit and added that the developed countries were duty-bound to do more so that the forthcoming global climate talks to be held in Paris later this year produces a successful outcome.
Chairperson of the Indian Council for Research on International Economic Relations, Isher Judge Ahluwalia, unveiled a report titled, “India: Pathways to Sustaining Rapid Development in a New Climate Economy” prepared jointly by World Resources Institute and ICRIER.
As per the report, “The investments we make over the next 15 years will be decisive for the future of our climate system and economy. Around USD 90 trillion globally will need to be invested in cities, land use and energy infrastructure between now and 2030 to deliver development and growth.”
The report lists 11 important areas for reform of energy systems, land use and cities, in order to boost development and reduce poverty in a sustainable manner.