Last year, the Union Cabinet approved India’s updated Nationally Determined Contributions (NDCs) incorporating the Prime Minister’s ‘Panchamrit’ strategy announced at the Glasgow conference into enhanced climate targets.
The finance ministry is examining the possibility of allowing financial institutions to raise funds from blended finance instruments to invest in green climate projects, sources said. Blended finance involves leveraging of financial resources of the public sector or philanthropies to phase in private sector investment, thereby catalysing private finance in high-risk and long-gestation projects.
The use of blended finance promotes investments in new and emerging sectors and it attracts commercial capital towards projects that contribute to sustainable development, while providing financial returns to investors, the sources said, adding, it holds the potential to catalyse private finance in such projects.It is still to be tested and therefore the ministry is looking at it from all possible angles, the sources said.
Blended finance is aligned to the Prime Minister goal to cut its emissions to net zero by 2070. Prime Minister Narendra Modi, announced India’s aim of achieving net zero emissions by 2070 at Glasgow in 2021. Last year, the Union Cabinet approved India’s updated Nationally Determined Contributions (NDCs) incorporating the Prime Minister’s ‘Panchamrit’ strategy announced at the Glasgow conference into enhanced climate targets.
According to the updated NDC, India now stands committed to reducing emissions intensity of its GDP by 45 per cent by 2030, from 2005 level, and achieving about 50 per cent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. NDCs means national plans and pledges made by a country to meet the goal of maintaining global temperature increases to well below 2 degrees Celsius above pre-industrial levels, while aiming for 1.5 degrees Celsius to avoid the worst impacts of climate change.
Sources said, the Securities and Exchange Board of India and the Reserve Bank of India are engaging with the International Sustainability and Standards Board (ISSB) for standards to be issued on sustainable finance and climate finance.
There is a need for engagement with the standard setting body so that obligation should not be too harsh and unviable for Indian companies, sources said, adding, it should not be tilted towards developed countries and emerging economies are unable to follow it.ISSB is supposed to announce standards for sustainable finance and climate finance in the next couple of months, sources said.
Source:financialexpress.com