FCC

Maha govt establishes Green Panel to raise Rs 50 bn through Green Bonds

2023-07-14

The Maharashtra state government has established a green panel with the aim of generating Rs 50 billion through green bonds to combat climate change. This committee, known as the Maharashtra Green Finance Working Committee (MGFWC), will be led by the state finance secretary, and its remaining seven members will consist of bureaucrats from various departments such as planning, energy, environment and climate change, revenue, and forests.

In line with the central government's objective to raise Rs 160 billion through green bonds as part of its overall market borrowings in 2022-23, Deputy Chief Minister and Finance Minister Devendra Fadnavis announced in the budget speech that the state government plans to raise Rs 50 billion in green bonds by 2024. These funds will be dedicated to projects related to renewable energy, green buildings, green hydrogen, electric mobility, and charging infrastructure.

The committee's responsibilities include finalising the framework for green bonds, approving projects that will be funded through these bonds, and overseeing the progress of these projects to ensure timely completion.

Earlier this year, the central government reported that Rs 80 billion had already been raised through sovereign green bonds (SGBs). The funds obtained from these bonds will be allocated to public sector initiatives aimed at reducing the carbon intensity of the economy.

To guide entities seeking to issue green bonds, the central government has developed a framework based on the recommendations of the International Capital Market Association Green Bond Principles. This framework focuses on four key components and emphasises the issuer's transparent process and disclosure, enabling investors, banks, and other stakeholders to understand the nature of the green bond.