India to increase green bond spending by 44%
ECONOMY & POLICY

India to increase green bond spending by 44%

India plans to increase spending on green projects and schemes by almost 44% in the next fiscal year, utilising proceeds from sovereign bonds. The move reflects the government's commitment to expedite the financing of clean energy initiatives, with the goal of diminishing the country's carbon footprint and contributing to the ambitious target of achieving net-zero emissions by 2070.

As per the expenditure plan outlined by the finance ministry for FY25, the government aims to allocate funds amounting to Rs 320.62 billion for green projects and schemes, a notable increase from Rs 223.24 billion in the current fiscal year.

The funding requirements have been formulated based on proposals submitted by various ministries. Although the precise amount of green bonds to be issued in the upcoming fiscal will be determined when the government finalizes its borrowing calendar, the official anticipates issuing bonds valued between Rs 250-300 billion in FY25, up from Rs 200 billion in the current year, owing to increased funding needs.

The anticipated expenditure on green projects and schemes in the current fiscal is projected to surpass the funds raised through these bonds by Rs 23.24 billion. Initially, the government had set the green funding requirement for FY24 at Rs 237.64 billion. To address concerns about potential misuse of such funds, officials indicated that spending would be kept higher than actual borrowing, emphasising that the funds raised must strictly be used for green projects.

While the government's overall annual budgetary spending on green projects spans various sectors, the expenditures are not precisely categorised according to the environmentally friendly nature of the projects. However, since the government began utilizing green bonds for fundraising in FY23, it has been necessary to formally identify specific green projects to be supported by the proceeds.

In terms of fund deployment, the expenditure plan for FY25 indicates that almost 47% of the green investments are earmarked for railways, followed by projects in new and renewable energy (42%), housing and urban affairs (10%), environment and climate change (0.5%), and other sectors.

Railways, new and renewable energy, and housing and urban affairs have consistently accounted for the majority of the expenditure funded through green bonds in FY23 and FY24. The largest portion of the proposed funding requirement (Rs 120 billion) pertains to the production of energy-efficient electric locomotives, followed by solar energy (Rs 100 billion).

Similar to the current fiscal year, the size of the green bond issue for FY25 would be included in the Centre's overall market borrowing plan for the second half of the fiscal year.

India plans to increase spending on green projects and schemes by almost 44% in the next fiscal year, utilising proceeds from sovereign bonds. The move reflects the government's commitment to expedite the financing of clean energy initiatives, with the goal of diminishing the country's carbon footprint and contributing to the ambitious target of achieving net-zero emissions by 2070. As per the expenditure plan outlined by the finance ministry for FY25, the government aims to allocate funds amounting to Rs 320.62 billion for green projects and schemes, a notable increase from Rs 223.24 billion in the current fiscal year. The funding requirements have been formulated based on proposals submitted by various ministries. Although the precise amount of green bonds to be issued in the upcoming fiscal will be determined when the government finalizes its borrowing calendar, the official anticipates issuing bonds valued between Rs 250-300 billion in FY25, up from Rs 200 billion in the current year, owing to increased funding needs. The anticipated expenditure on green projects and schemes in the current fiscal is projected to surpass the funds raised through these bonds by Rs 23.24 billion. Initially, the government had set the green funding requirement for FY24 at Rs 237.64 billion. To address concerns about potential misuse of such funds, officials indicated that spending would be kept higher than actual borrowing, emphasising that the funds raised must strictly be used for green projects. While the government's overall annual budgetary spending on green projects spans various sectors, the expenditures are not precisely categorised according to the environmentally friendly nature of the projects. However, since the government began utilizing green bonds for fundraising in FY23, it has been necessary to formally identify specific green projects to be supported by the proceeds. In terms of fund deployment, the expenditure plan for FY25 indicates that almost 47% of the green investments are earmarked for railways, followed by projects in new and renewable energy (42%), housing and urban affairs (10%), environment and climate change (0.5%), and other sectors. Railways, new and renewable energy, and housing and urban affairs have consistently accounted for the majority of the expenditure funded through green bonds in FY23 and FY24. The largest portion of the proposed funding requirement (Rs 120 billion) pertains to the production of energy-efficient electric locomotives, followed by solar energy (Rs 100 billion). Similar to the current fiscal year, the size of the green bond issue for FY25 would be included in the Centre's overall market borrowing plan for the second half of the fiscal year.

Next Story
Products

TOTO India Launches Premium G & L Showers with Sleek Faucet Range

TOTO India has launched its G Shower and L Shower series, alongside an expanded range of GT, LH, and Pull-Out lavatory faucets. The collection blends advanced technology, refined aesthetics, and everyday comfort, staying true to TOTO’s philosophy of creating spaces that are both beautiful and functional. The G Shower series delivers the 3Rs of showering: Relaxing, Refreshing, and Revitalizing. Features include the Calming Shawl spray mode, Warm Spa technology, and multiple overhead and hand-shower options across eight finishes. The L Shower complements this with easy-to-use controls sui..

Next Story
Infrastructure Energy

Hero Future Energies Secures Funding for 120 MW Hybrid Project

Hero Future Energies (HFE), through its SPV Clean Renewable Energy Hybrid Three, has secured Rs 19.08 billion in funding from the State Bank of India (lead) and Canara Bank. The funds will be used to develop and construct HFE’s 120 MW renewable energy hybrid project at Kurnool, Andhra Pradesh. The project, contracted with SJVN, integrates wind, solar, and storage technologies to deliver reliable peak power. With a 21-year repayment period, the funding ensures timely execution and the commencement of commercial operations. The financial closure demonstrates continued lender confidence in..

Next Story
Infrastructure Energy

IOC GPS Renewables Raises Rs 8.36 billion Debt for Compressed Biogas Plants

IOC GPS Renewables Private Limited (IGRPL), a joint venture between IndianOil Corporation  and GPS Renewables, has raised Rs 8.36 billion (approx. US$ 95 million) in debt financing from Indian Bank to execute nine Compressed Biogas (CBG) projects across India.   The funding is the largest single-bank debt raise in the CBG sector and the first fully non-recourse financing in India for these projects. The plants—four in Haryana, three in Uttar Pradesh, one each in Chhattisgarh and Andhra Pradesh—will each produce 15 tonnes of CBG per day using paddy straw as feedstock. All nin..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?