19.6 ndian onom
of a more sustainable economy5. By now, several into a green global economy appeared at different
working definitions have come up—China’s global fora including the G20. Experts believe that
Green Credit Guidelines; the Climate Bonds for developing countries like India, private finance
Taxonomy of Green Bonds; the International will not readily be forthcoming and public finance
Development Finance Club’s (IDFC) approach (both international and domestic) needs to be
to reporting on green investment; the World used to leverage private finance.
Bank/International Finance Corporation’s (IFC) India and Green Development: Green finance
Sustainability Framework; and the UK Green is yet to pick up in India. Attaining the ambitious
Investment Bank Policies. solar energy target, development of solar cities,
Current definitions in use reveals sizeable setting up wind power projects, developing smart
variance—clean energy; energy efficiency; green cities, providing infrastructure which is considered
buildings; sustainable transport; water and waste as a green activity and the sanitation drive under
management; greening the banking system, the the ‘Clean India’ or ‘Swach Bharath Abhiyan’ are
bond market and institutional investment; as well all activities needing green finance.
as areas of controversy such as nuclear and large- India created a corpus called the NCEF
scale hydro energy, bio-fuels and efficiency gains (National Clean Energy Fund) in 2010-11 out
in conventional power. of the cess on coal produced/imported (‘polluter
The World Bank Group has set up an pays’ principle) for the purpose of financing and
informal Sustainable Banking Network of banking promoting clean energy initiatives and funding
regulators, led by developing countries, to research in the area of clean energy. Some of the
promote sustainable lending practices. In 2015, projects financed by this fund include innovative
green bonds issued by governments, banks, schemes like—
corporates and individual projects amounted to (i) a green energy corridor for boosting the
US$42 billion. transmission sector;
At the global level, more than 20 stock (ii) Jawaharlal Nehru National Solar
exchanges have issued guidelines on environmental Mission’s (JNNSM) installation of solar
disclosure, and many green indices and green ETFs photovoltaic (SPV) lights and small
(exchange-traded funds) have been developed. A capacity lights, installation of SPV water
growing number of institutions, including the pumping systems, SPV power plants,
Bank of England and Bank of China (Industrial and grid-connected rooftop SPV power
Commercial Bank of China), have begun to assess plants; and
the financial impact of climate and environmental (iii) pilot project to assess wind power
policy changes. Germany, the US and the UK potential.
have developed interest subsidy and guarantee
By March 2018, most of the banks had issued
programmes for green financing, and over a dozen
green bonds in India. Proceeds from these bonds are
government-backed green investment banks are
mostly used for funding renewable energy projects
operating globally. The G-20 has also recently set
such as solar, wind and biomass projects and other
up a GFSG (green finance study group).
infrastructure sectors, with infrastructure and
Theissueofmobilisingprivatefinancefortransforming
energy efficiency being considered as green in their
5. Green Finance Study Group—as quoted by the entirety. By early 2016, the SEBI (Securities and
Ministry of Finance, Economic Survey 2015–16, Vol. Exchange Board of India) approved the guidelines
2, pp. 182-83.
for green bonds. India needs to take care of certain