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SBI Chairman Dinesh Kumar Khara, speaking at the FICCI ESG Summit on Monday, projected a significant increase in rupee-denominated green bond issuances by Indian corporates in the second half of FY24. This surge is expected due to the government’s borrowing plan and the pricing reference from previously issued government green bonds.
Green bonds, which currently make up only 0.7% of total bond issuances since 2018, are predicted to rise to 8-10% of the share. The Indian government has already issued ₹16,000 crore worth of green bonds in FY23 and plans another issuance of ₹20,000 crore in FY24.
Khara emphasized the need for more global capital inflow for India to achieve its sustainable development goals, which require approximately $600 million annually. He highlighted SBI’s initiatives towards promoting green initiatives among borrowers and assessing its ₹33 lakh crore portfolio’s carbon footprint.
The Chairman also cautioned against ‘green washing’, a practice where companies give a false impression of their environmental friendliness. He acknowledged the growing market for ‘yellow’ and ‘blue’ bonds, which are designed to fund projects that have environmental benefits.
In his remarks, Khara also underscored India’s ambition to become a net-zero carbon emissions economy by 2070. This goal necessitates an annual investment of about $110 billion by 2030 and a global investment of $275 trillion for net-zero by 2050.
India is currently the sixth-largest issuer of green bonds in the Asia-Pacific region, having raised $43 billion since 2014, with significant contributions from domestic companies. The SBI Chairman stressed the need for better corporate reporting and the creation of annual databases to track progress and promote transparency in this growing sector.
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